TL;DR
- The Monetary Authority of Singapore (MAS) opened a public consultation to recognize stablecoins issued across multiple jurisdictions under its regulatory framework.
- The proposal would allow tokens jointly issued by a Singaporean and a foreign issuer to receive the “MAS-regulated stablecoins” label if risks are adequately mitigated.
- MAS is also evaluating the recognition of foreign stablecoins regulated under comparable frameworks for use in cross-border wholesale transactions.
The Monetary Authority of Singapore (MAS) has reopened the debate around its regulatory framework for stablecoins by launching a public consultation that proposes allowing jointly issued tokens by entities from different jurisdictions.
This process aims to revisit the stance adopted in 2023, when the regulator restricted the scheme to stablecoins issued exclusively in Singaporean territory and pegged to the Singapore dollar or a G10 currency.
The consultation covers legislative amendments to the Payment Services Act (PSA), the regulation that governs payment services and operators in the country. Under the central proposal, a stablecoin jointly issued by a local and a foreign issuer could qualify as a “MAS-regulated stablecoin”, provided that the associated risks are sufficiently mitigated.
At the same time, the regulator is evaluating recognizing a limited number of stablecoins issued abroad under comparable regulatory frameworks, focusing on their potential use in cross-border wholesale transactions.
MAS Faces the Challenge of Regulatory Equivalence
In 2023, MAS itself had argued that regulatory equivalence with other jurisdictions posed technical and cooperation difficulties. Among the obstacles identified were the traceability of the origin of stablecoins with combined reserves and the ability of assets held abroad to respond to redemption requests. The new consultation suggests that the regulator has found ways to address at least some of those issues.
The proposed requirements for issuers include value stability backed by reserves, minimum capital, par redemption and disclosure obligations. Paying interest on regulated stablecoins would also be prohibited, and issuers would be required to conduct stress tests, along with orderly recovery and resolution plans.
As an additional consumer safeguard, issuers will be required to protect funds received before the corresponding tokens are issued. Stablecoins outside the framework will continue to be treated as digital payment tokens under existing rules. The regulator will accept public comments until October 16, 2026.
