Singapore is consulting on changes to its stablecoin regime that would stop issuers of MAS-regulated stablecoins from paying interest to token holders, while also adding tougher operational and customer-protection requirements.

In a consultation published on Sept. 1, the Monetary Authority of Singapore said the proposed changes are intended to support responsible financial innovation by setting clearer guardrails for stablecoins that meet high standards for value stability and governance. The measures are not yet in force, and public comments are open until Oct. 16.

Interest ban tied to regulated label

Under the proposal, issuers licensed under Singapore’s Single-Currency Stablecoin framework would be barred from paying interest on MAS-regulated stablecoins. MAS also set out how supervision would work and which tokens could use the MAS-regulated stablecoin designation.

Issuers that are licensed within the framework could describe themselves as licensed MAS-regulated stablecoin issuers. Tokens that do not fall within the framework would continue to be treated as digital payment tokens and remain subject to existing consumer-protection rules.

Broader safeguards for issuers and customers

The consultation goes beyond the interest question and seeks feedback on several core features of the regime, including capital requirements, value stability, redemption at par, and disclosure obligations for issuers.

MAS is also proposing enhancements such as stress testing, recovery planning, orderly wind-down arrangements, and stronger protection for customer funds received before stablecoins are issued. These additions would tighten expectations around resilience and handling of customer assets if an issuer comes under pressure or needs to shut down operations.

Possible expansion to cross-border and foreign-issued tokens

Singapore’s current framework covers domestically issued single-currency stablecoins pegged to the Singapore dollar or a G10 currency. The new proposals would extend that structure in two directions.

First, cross-border stablecoins jointly issued by Singaporean and foreign entities could potentially qualify for the MAS-regulated label. Second, MAS said a limited number of foreign-issued stablecoins overseen under comparable regulatory regimes could also be recognized.

That recognition would be selective rather than automatic. MAS indicated that not every overseas-regulated stablecoin would qualify, and said any jointly issued or foreign-issued token would still need to meet standards addressing operational and regulatory risk. According to the consultation, qualifying foreign-issued stablecoins could support cross-border wholesale transactions.

Consultation period now underway

For now, the proposals remain at the consultation stage. MAS is accepting comments on the draft legislation and related policy positions until Oct. 16.

The next confirmed step is the close of that feedback period, after which MAS will decide whether and how to turn the proposed measures into final rules. Until then, the ban on issuer-paid interest and the broader changes to the stablecoin framework remain proposed amendments rather than binding requirements.

Source: news.bitcoin.com