Stablecoins sit between everyday money and the crypto market, and a rule change for them can reach anyone who pays, saves or trades online. The Monetary Authority of Singapore has now put forward a licence and a protected label for coins that aim to hold a steady value.
In this article, we will explore what MAS proposed, how the draft rules would work, what happens to coins outside the framework, and how ordinary users and businesses can check who they are dealing with.
Draft Status of the Proposals and the Road So Far
On 1 September 2026, MAS published a consultation paper on proposed amendments to the Payment Services Act 2019. The amendments are meant to put its single-currency stablecoin framework, which MAS abbreviates as MAS-SCS, into legislation. Public comment closed on 16 October 2026, so the industry, banks, law firms and interested individuals have already had their say. What happens next is up to MAS and the government, and that is the part readers should keep firmly in mind.
What a Consultation Paper Does
A consultation paper is a draft. It sets out what the regulator is minded to do and asks for views before anything is fixed. Nothing in it binds an issuer, an exchange or a customer today. Only when the amendments are passed, and any subsidiary legislation is issued, do the proposals become rules that can be enforced, and the final text can differ from the draft in important ways.
Readers who see headlines about a “new stablecoin law” should therefore read them with care. The accurate description is a proposed law that has finished its public consultation round. MAS has not, according to the material reviewed here, given a timeline for finalising the amendments or for the subsidiary legislation that would carry the detail. Anyone planning around a particular start date is guessing.
A Long Road From 2022
This is not MAS’s first pass at the subject. It first consulted on its stablecoin framework on 26 October 2022 and published its response to the feedback on 15 August 2023. The law firm Gibson Dunn notes in its client alert that the framework had originally been expected in the fourth quarter of 2025, which means the timetable has moved. The latest paper is the step that translates policy into drafting changes to the Act.
Why the long gap? Stablecoin markets have changed a great deal since 2022, and other jurisdictions have been writing their own rules in the meantime. A regulator that waits for peers to move can calibrate better, although it also leaves a period in which Singapore residents use products that sit outside any dedicated regime. That trade-off is a sensible backdrop to everything that follows.
How a Stablecoin Works and Why Backing Is Not a Guarantee
A stablecoin is a digital token designed to hold a steady value, most often by being backed with reserve assets. The idea is that one coin should be worth one unit of a currency, such as one Singapore dollar or one US dollar, so that people can use it for payments and settlement without the price swings seen in assets such as bitcoin. The issuer takes in money or assets, creates coins, and promises that coins can later be handed back for the underlying currency.
Everything in that description depends on the quality of the promise. If the reserves are cash and short-term bank deposits held safely and kept separate from the issuer’s own money, the promise is easier to trust. If the reserves are riskier, locked up, mixed with other funds or simply not disclosed, a coin can slip below its target value, and holders may find that redeeming it is slow or not possible at the full amount.
Backed Does Not Mean Risk-Free
The word “backed” tells you that something stands behind the coin, not how good that something is. A coin can be fully backed on paper and still be exposed to the failure of the bank holding its reserves, to operational mistakes, to a rush of holders asking for money back at the same time, or to the issuer’s own insolvency if the legal protection of reserves is weak. This is exactly why the MAS draft is concerned with reserve composition, custody, redemption and stress testing, not only with whether reserves exist.
For a household, the practical lesson is simple. A stablecoin is not a bank deposit, it carries no deposit insurance simply because it is called stable, and a licence from MAS, if the proposals become law, would not turn it into a guaranteed product. A licence would mean the issuer has met defined standards and is supervised against them.
Why Regulators Care About This Niche
MAS Deputy Managing Director (Financial Supervision) Ho Hern Shin said that trusted and well-regulated stablecoins “can serve as a credible settlement asset in tokenised financial markets”. That sentence explains the policy motive. MAS is not trying to close the door on the technology. It wants a category of coin that financial institutions can use with confidence for settlement, while keeping weaker products clearly labelled as something else.
The MAS-Regulated Label and Who May Use It
The most visible part of the proposal is a protected label. According to the MAS release, only issuers licensed under the framework may call themselves MAS-regulated stablecoin issuers, and only their coins may be labelled “MAS-regulated stablecoins”. Gibson Dunn describes the licence as a standalone class for stablecoin issuance, separate from the other categories in the Payment Services Act.
The label is meant to work like a signal. If a platform advertises a coin as a MAS-regulated stablecoin, a reader should be able to trust that the issuer has been licensed and is supervised against the reserve, redemption and disclosure standards. If a coin cannot carry the label, the rest of the market is told, in effect, to treat it with more caution.
Which Coins Can Qualify
The framework covers single-currency stablecoins issued in Singapore and pegged to the Singapore dollar or to any G10 currency. That scope is narrower than the stablecoin market as a whole. Coins pegged to a basket of currencies, to commodities, or to currencies outside that group fall outside the framework, as do algorithmic designs that try to hold a value without enough reserves behind them. Those will not be able to use the protected label.
The wording “issued in Singapore” matters too. Many popular coins are issued abroad. The proposal therefore asks questions about multi-jurisdictional issuance, where a foreign issuer takes part, and about recognising a limited number of comparable foreign-regulated stablecoins. According to the MAS release, that recognition is aimed mainly at wholesale cross-border use, not at the retail market.
Holding Out Without a Licence
The label is protected by law, not just by custom. Gibson Dunn reports that the proposal creates holding-out offences, with fines of up to S$250,000 for entities. For individuals, the penalty would be a fine of up to S$125,000, imprisonment of up to three years, or both. Those figures come from a single law firm’s summary of the consultation paper, so readers who need precision should check the paper on the MAS website.
Heavy penalties for misusing a label are a familiar technique in financial regulation. The aim is to make the term mean something, so that retail users are not misled by a marketing phrase that sounds official. It also gives MAS a clean enforcement tool against operators who copy the language without the licence.
Requirements Under Consultation
MAS describes four areas as key requirements: value stability, capital, redemption at par and disclosure. The consultation paper explores them in more depth, and several details, according to Gibson Dunn, are worth knowing. Because Gibson Dunn is the single source for much of the detail, the specifics below are best read as the proposal as summarised by one law firm, which MAS may adjust before anything becomes law.
Reserves and Their Custody
Under the summary, reserves would have to be at least equal to the par value of the coins in circulation. In plain terms, for every coin outstanding there must be at least the matching amount of reserve assets. The reserves would be held in segregated trust accounts with permitted custodians, which is meant to keep them away from the issuer’s creditors if the issuer fails.
MAS is also considering a minimum share of reserves in cash or bank deposits. The sheet from which this article draws gives no Singapore figure for that share, so no number can be quoted here. It is a useful sign of direction, though: the regulator is weighing how liquid the backing should be, since liquidity decides whether redemptions can be met quickly.
An illustration with invented round numbers shows why. Suppose an issuer has 1,000 coins outstanding and holds reserves worth 1,000 units, but only 100 units are in cash and the rest sit in assets that take days to sell. If holders suddenly ask for 500 units back, the issuer is fully backed yet may struggle to pay on time. A minimum cash share is designed to narrow that gap.
Redemption at Par
The framework would require redemption at par within MAS-prescribed timeframes. Par means one coin returns one unit of the pegged currency, with no discount. Gibson Dunn does not specify the timeframes, and the draft rules leave that to later detail, so no number of days can be quoted.
Redemption is the heart of a stablecoin’s credibility. A coin that cannot be reliably swapped back at full value is just a speculative token with a peg slogan attached. Setting enforceable timeframes shifts the question from “will the issuer honour redemption” to “did it honour redemption on time”, and that can be measured and supervised.
Disclosure, Stress Testing and Wind-Down
Issuers would need to publish white-paper disclosure so that holders can see what backs the coin and how it is managed. Gibson Dunn reports stress testing at least quarterly, plus board-approved recovery and wind-down plans reviewed at least annually. MAS also seeks views on stress testing and on recovery and orderly wind-down plans generally, and on safeguards for customer monies received before stablecoins are issued.
The wind-down plan is the least glamorous and arguably the most important element. It is a written answer to the question of what happens to holders if the business stops. Having it approved by the board, and reviewed every year, makes failure something an issuer must plan for in advance, instead of a surprise discovered in a crisis.
Rules for Banks, Single-Purpose Issuers and the Interest Ban
Several proposals deal with who may issue and how an issuer may behave. They are structural rules, and they shape what the market could look like if the amendments pass.
Banks Must Use a Separate Entity
Gibson Dunn says that banks and merchant banks would have to issue through a separate non-bank licensed entity. Issuers would also be barred from conducting other business. Together these rules point to a ring-fenced issuer, a company whose only job is to run the stablecoin and hold its reserves, so that trouble elsewhere in a group does not drain the backing.
For an ordinary reader this reduces one worry: that the reserves of a coin are exposed to the risks of the issuer’s lending, trading or other lines of business. It does not remove all risk, and a single-purpose firm can still fail, but the arrangement is designed so that holders face one clear set of risks, not several tangled ones.
No Interest on MAS-Regulated Coins
MAS also seeks views on a ban on paying interest on MAS-regulated stablecoins. The logic is that a coin meant for settlement and payment should behave like money, not like an investment product that competes with bank deposits. If an issuer could pay holders a yield, it would have an incentive to take risk with the reserves to fund that yield, which defeats the purpose of stability.
This has a practical side for consumers. A claim that a MAS-regulated stablecoin pays a guaranteed return would clash with the proposal on its face. If such a ban is adopted, anyone promising a regular yield on a so-called regulated stablecoin deserves an immediate second look.
Caps, and What Is Still Open
MAS also invites views on issuance or holding caps, but, according to the fact material used here, no Singapore figures are given. It also asks about a transition period for retail safeguards, which Gibson Dunn says is being consulted on, again with no stated duration. These open points are reminders that the final package may look different from the draft.
Coins Outside the Framework Are Treated as Digital Payment Tokens
The framework does not make other stablecoins disappear. According to the MAS release, stablecoins that are not MAS-regulated are treated as digital payment tokens and face the same consumer protection safeguards as those tokens. In other words, they stay within the existing regime for digital payment tokens, which MAS already supervises through the Payment Services Act.
That arrangement has an important consequence. A coin that lacks the label is not necessarily a scam, and a coin that has the label is not necessarily safe in every sense. The label tells you about the regulatory category and the standards the issuer must meet. It does not tell you whether the market will treat the coin well on a particular day, or whether the platform where you hold it is sound.
Retail Protections Proposed for the Rest
Gibson Dunn reports that retail protections are also proposed for non-MAS-regulated stablecoins. These include reserve disclosures, risk warnings, and a restriction on marketing them to retail customers as “stablecoins”. The last item is revealing: the plain word “stablecoin” itself would become something that cannot be used casually in marketing aimed at retail customers when the coin sits outside the framework.
If that proposal survives, marketing language will change. Platforms may start describing such coins by other terms, and readers will need to look past the vocabulary to the facts underneath: who the issuer is, where it is licensed, what backs the coin and how redemption works.
Why the Line Matters to Users
The dividing line is a consumer-protection device. By limiting the word and the label, MAS hopes to prevent a situation in which a risky token borrows the credibility of a regulated one. People who trade coins for sport will probably notice little at first. People who use them for payments, or who park savings in them because the word “stable” sounds safe, are the ones the label is meant to help.
What Changes for Users and Businesses
If the proposals go through largely as drafted, most changes would be felt gradually, and many people would never notice. The groups most affected are issuers, who must meet the licence standards, platforms that list or sell stablecoins, and businesses that accept digital payments. The table below summarises how the picture could look for each group, based on the draft as reported. It is a summary of proposals, not a statement of current law.
| Who | What the proposals could mean | What to watch |
| Everyday holder | A clearer way to tell regulated coins from the rest, and a ban on advertised interest on regulated coins | Whether the platform names the issuer and the licence accurately |
| Casual trader | Coins without the label stay under digital payment token safeguards, with added disclosures and warnings | Risk warnings, reserve disclosures and changes in how coins are described |
| Business accepting payments | A possible route to accept coins with an identifiable regulatory status | Redemption terms, settlement timing and the issuer’s reserve reports |
| Bank or merchant bank | Issuance through a separate non-bank licensed entity, with no other business inside it | Group structure and the final transition arrangements |
| Foreign issuer | Questions on joint issuance and on recognition of a limited number of comparable foreign coins | Whether recognition is confined mostly to wholesale cross-border use |
Businesses That Take Digital Payments
A shop or online merchant that accepts stablecoins should treat the draft as an early indicator, not as a compliance checklist. Before accepting any coin, it is sensible to ask who issues it, what backs it, how fast it can be converted to Singapore dollars and what happens if the peg breaks. The framework, once final, would make some of those answers easier to verify for MAS-regulated coins.
Accounting, tax and customer-refund policies are separate questions and depend on the business. A professional adviser, and the relevant agency, can say what applies to a particular firm. Nothing here is advice for a specific company.
Consumers and Savers
For consumers, the most useful change would be consistency. If everyone uses the label in the same way, comparing coins becomes easier. It will still take effort, because a licence does not tell you which coin offers better convenience or lower fees.
It is also wise to keep expectations modest about timing. The consultation closed in mid-October, and the paper does not give a date by which a final law will arrive. Until the law changes, the current rules for digital payment tokens remain the ones that apply, and MAS public warnings remain a valuable source of information.
Scam Risks and How to Check a Token or Platform
Regulatory news attracts opportunists. The phrase “regulated stablecoin” can be borrowed by anyone, especially while the framework is still a draft and nobody can legally hold the MAS-regulated label yet. Readers should be on alert for any pitch that links a regulated stablecoin to a guaranteed return, a fixed monthly payout or a promise that the investment cannot lose money.
Questions Worth Asking Before You Send Money
Start with the basics. Who is the issuer, and in which country is it incorporated? Is the company on a public register of licensed entities? Can you read the reserve and redemption terms in plain language, and do they match what the sales material says? Is the person contacting you someone you reached out to, or someone who messaged you first through social media or a chat app?
A pitch that creates urgency, promises returns above what regulated deposit products offer, or asks you to move money to a private wallet should be treated as a warning sign. Legitimate issuers do not need you to decide in an hour.
Using Official Lookups
The MAS Financial Institutions Directory lists entities that MAS licenses or regulates, and MAS also publishes public warnings about firms that are not authorised. Names can be similar, so check the exact company name and the licence type with MAS directly, and treat the directory as a starting point, not a final verdict. Because the stablecoin licence does not exist yet, no firm can today be listed as a licensed stablecoin issuer under this proposed framework.
If a firm claims to hold a stablecoin licence from MAS, it is making a claim that cannot be true at this stage under the proposals. That is worth reporting to the authorities, and a call to the police scam helpline or a report to MAS is the sensible route if money has already moved.
Final Thoughts
Putting everything together, a reader who wants to act sensibly can follow a short order of checks. None of this is investment advice, and the right choice depends on personal circumstances. A licensed financial adviser, or the agency itself, can speak to individual situations.
First, treat the proposals as a draft. Read news about them with the difference between a consultation and a law in mind, and watch MAS announcements for the final amendments and any subsidiary legislation. Second, if you already hold a stablecoin, find out who issues it, what the reserves are, how redemption works and whether the platform where you keep it is regulated for the service it provides. Third, once the label exists, check that any coin described as MAS-regulated really sits with a licensed issuer, by looking up the name with MAS rather than trusting an advertisement.
Fourth, keep stablecoins in proportion. Even a well-regulated coin is designed for payment and settlement, and none of the proposals promise that holders cannot lose money. Fifth, treat any offer of interest or a guaranteed return on a regulated coin as a red flag, since the draft contemplates a ban on interest for MAS-regulated coins. Finally, if you run a business, ask your bank, accountant or lawyer how the proposals could affect you, and revisit the question when the final rules are published.
Frequently Asked Questions
1. Is the MAS Stablecoin Licence Already in Force?
No. MAS published a consultation paper on 1 September 2026 proposing amendments to the Payment Services Act 2019, and the consultation closed on 16 October 2026. The proposals only take effect once the amendments are passed and any subsidiary legislation is issued.
2. When Will the Final Stablecoin Rules Be Announced?
No timeline has been given for finalising the amendments or the subsidiary legislation. Gibson Dunn notes that the framework was originally expected in the fourth quarter of 2025, so dates have shifted before. Check MAS announcements for updates.
3. Which Stablecoins Can Be Called MAS-Regulated Stablecoins?
Under the proposals, only coins from issuers licensed under the framework could carry the label. The framework covers single-currency stablecoins issued in Singapore and pegged to the Singapore dollar or any G10 currency.
4. Can I Still Buy or Hold Other Stablecoins in Singapore?
Under the proposals, stablecoins that are not MAS-regulated would be treated as digital payment tokens and face the same consumer protection safeguards as those tokens. Gibson Dunn also reports proposed disclosures, risk warnings and a restriction on marketing them to retail customers as “stablecoins”. This is general information, not advice on any product.
5. Does a MAS-Regulated Stablecoin Pay Interest?
MAS is seeking views on a ban on paying interest on MAS-regulated stablecoins. If it is adopted, anyone promising a yield on a regulated stablecoin would be going against the proposal, which is a reason to be careful.
6. How Do I Check Whether a Token or Platform Is Regulated?
Search the exact company name in the MAS Financial Institutions Directory and read MAS public warnings, then confirm the licence type with MAS if you are unsure. Similar names are common, so do not rely on an advertisement alone.
