Singapore has a message for the stablecoin industry, and it is about as subtle as a regulatory document gets: if your token pays holders yield, it will not carry the city-state's official seal of approval. In a consultation paper published on September 1, the Monetary Authority of Singapore proposed turning its single-currency stablecoin framework into binding law — with full reserve backing, redemption at par, stress testing, and an outright prohibition on paying interest or other yield to holders.
The consultation, numbered P015-2026, closes on October 16, 2026. It is still a proposal, and the industry should treat it as draft text rather than finished statute. But with draft legislative language attached, it is best read as the direction of travel — and the direction is toward the strictest major-jurisdiction stablecoin regime in Asia.
What MAS is actually proposing
Singapore finalized a stablecoin framework back in 2023, but it sat as policy rather than binding law. The September consultation moves it into the Payment Services Act 2019 and adds requirements that account for how the market has developed since. MAS frames the amendments as giving effect to "a stablecoin framework that promotes responsible financial innovation." The scope is deliberately narrow: single-currency stablecoins issued in Singapore and pegged to the Singapore dollar or a Group of Ten currency.
The core requirements for an issuer seeking the regulated label are uncompromising:
- Full reserve backing: reserve assets worth at least 100 percent of outstanding tokens, held separate from the issuer's own funds and custodied only with licensed financial institutions.
- No yield: issuers would be barred from paying interest or other yield to holders of MAS-regulated stablecoins.
- Redemption at par: holders must be able to redeem tokens at face value, within a short prescribed window.
- Resilience planning: stress testing, recovery plans, and orderly wind-down arrangements for issuers that run into financial or operational distress.
- Capital and disclosure: issuers must maintain capital and meet prescribed disclosure obligations to users.
In plain terms, MAS wants a stablecoin to behave like fully backed payment money — not a yield product competing with bank deposits, and not a deposit account in crypto clothing. As the regulator's September 1 release put it, trusted and well-regulated stablecoins can serve as a settlement asset in tokenised financial markets while reducing risks to users and the wider system. Ho Hern Shin, MAS deputy managing director for financial supervision, said the amendments would create clear regulatory guardrails for stablecoins that meet high standards of value stability and governance.
The yield ban is the headline
Of all the proposals, the interest ban is the most commercially significant. PayPal and Circle currently pay rewards to stablecoin holders in certain cases — a practice that would be incompatible with the proposed Singapore framework. The restriction aligns Singapore with the United States' GENIUS Act, enacted on July 18, 2025, which similarly bans yield-bearing dollar stablecoins, and with the European Union's MiCA treatment of e-money tokens.
The pattern is now unmistakable: the world's major jurisdictions have converged on the same bargain. A stablecoin can chase yield, or it can carry an official regulatory badge. It cannot do both. The constraint on stablecoin yield as an institutional return mechanism is hardening across multiple major jurisdictions simultaneously — which is why staking, where permitted, is increasingly discussed as the primary compliant on-chain yield alternative.
For issuers, the commercial question is whether the "MAS-regulated stablecoin" label is worth giving up the yield lever. For the firms that decide it is, the label becomes a moat: a credible, enforceable signal of quality in a market where trust is the scarcest commodity.
A label worth protecting
MAS is treating its regulatory label with unusual care. Under the proposals, only issuers licensed under the MAS framework could describe their tokens as "MAS-regulated stablecoins." Non-MAS-regulated stablecoins would continue to be treated as digital payment tokens and remain subject to Singapore's existing digital payment token consumer-protection measures — including customer risk-awareness assessments, a ban on trading incentives, and prohibitions on financing, margin, or leverage transactions.
That two-tier structure matters. It does not outlaw unregulated stablecoins; it segments the market. Regulated coins get the badge, the institutional credibility, and access to settlement use cases in tokenised markets. Everything else keeps operating under the stricter retail investor-protection rules Singapore already applies to crypto. The regime is as much about sorting the market as it is about policing it.
The foreign-stablecoin opening
One of the consultation's most notable shifts is its rethink of foreign issuance. Under the framework finalized in 2023, qualifying stablecoins generally had to be issued solely in Singapore. The new proposals open the door to multi-jurisdictional models: a stablecoin jointly issued by a Singapore-based issuer and a foreign issuer could qualify as an "MAS-regulated stablecoin" if the risks of the cross-border structure can be adequately managed. MAS is also considering recognizing a limited number of foreign-issued stablecoins regulated under comparable overseas frameworks, potentially permitting them for cross-border wholesale transactions.
That is a significant pivot, and it reflects the reality of how stablecoins are used. Dollar-pegged tokens dominate global settlement; a Singapore regime that ignored foreign-issued stablecoins would regulate itself into irrelevance for cross-border flows. The consultation's mechanism for recognizing comparable foreign frameworks could determine which tokens reach the region's institutional demand — and which issuers build their Asian compliance strategies around Singapore.
Singapore's wider digital-asset posture
The stablecoin consultation does not exist in isolation. MAS has granted 38 Major Payment Institution licences for digital payment token services as of September 2026, with licensed platforms including Coinbase, OKX Singapore, Bitstamp, and Revolut — though many serve only institutional or accredited investors. Retail staking remains banned for the general public in Singapore, with MAS judging it too opaque and risky for non-institutional investors.
The picture is of a regulator that is pro-innovation but unapologetically selective about who it lets near retail customers. Singapore is also racing Hong Kong for the position of Asia's stablecoin hub, with both cities advancing their own licensing regimes. The MAS consultation's careful treatment of foreign-issued tokens can be read as a competitive move: make Singapore the jurisdiction where the world's best-regulated stablecoins can earn a recognized badge, and the region's institutional flows will follow.
What happens next
Comments on the consultation close on October 16, 2026. After that, MAS will finalize the amendments to the Payment Services Act — a process that typically takes months, not weeks. Issuers, banks, and payment firms with Singapore ambitions should be preparing now: the 100 percent reserve requirement, the segregation and custody rules, and the yield prohibition will require structural changes to business models, not just compliance paperwork.
The direction of global stablecoin regulation is now set in three of the world's four major financial centers. The United States has its GENIUS Act no-yield provision. Europe has MiCA. Singapore is about to write the same bargain into law. The stablecoin of the future is fully backed, instantly redeemable, and pays you nothing for holding it. What it offers instead is something the industry has always needed more: the full faith of a regulator's badge.
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