Crypto01 September, 20262 min read
MAS Consults On Payment Services Act Amendments To Regulate Stablecoins In Singapore
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MAS proposes amendments to the Payment Services Act to regulate stablecoin issuers. Framework would allow cross-border, jointly issued stablecoins and overseas issuers.
6 outlets told this the same way.
MAS drafts stablecoin law
The Monetary Authority of Singapore (MAS) has published a consultation paper on proposed legislative amendments to the Payment Services Act 2019 (PS Act) to implement MAS’ regulatory framework for stablecoins in Singapore. The amendments would set out how stablecoin issuers may qualify to be MAS-regulated, and the safeguards they must meet to support value stability and user protection, MAS said in a statement. MAS’ Single-Currency Stablecoin (MAS-SCS) framework would permit only issuers licensed under the framework to describe themselves as licensed MAS-regulated stablecoin issuers and represent their stablecoins as “MAS-regulated stablecoins”.
Stablecoins not regulated by MAS would be treated as Digital Payment Tokens (DPTs) and be subject to the same consumer protection safeguards that apply to DPTs. MAS also proposes to allow stablecoins that are jointly issued by a Singapore and foreign issuer to be regulated under the MAS-SCS framework, and labelled as “MAS-regulated stablecoins”, provided that risks are sufficiently mitigated.
Guardrails: redemption, capital, disclosure
MAS is seeking feedback on requirements for issuers to ensure their stablecoins retain their value, maintain sufficient capital, allow users to redeem the tokens at their original value and provide relevant disclosure to users. The consultation also includes policy positions on multi-jurisdictional issuance of stablecoins and recognition of foreign-issued stablecoins, alongside additional requirements to safeguard financial stability and more consumer protection safeguards. MAS proposes several enhancements to the MAS-SCS framework, including the prohibition of interest to be paid on MAS-regulated stablecoins, the requirement for stress testing, and to have in place plans for recovery and orderly wind-down of MAS-regulated stablecoin issuers.
MAS additionally seeks feedback on safeguards similar to those applicable to existing PS Act licensees, including the requirement to safeguard customer’s monies received before the stablecoins have been issued. MAS Deputy Managing Director (Financial Supervision) Ho Hern Shin said the framework will provide “clear regulatory guardrails for stablecoins that meet high standards of value stability and governance.”
Cross-border use and tokenized markets
The consultation comes as regulated stablecoins are being tested in payment and settlement projects involving financial institutions operating in Singapore, with MAS-led BLOOM initiatives and other pilots referenced in the coverage. Crypto.news described MAS proposals that would implement its stablecoin framework into law while introducing rules for overseas issuers, interest payments and issuer wind-down plans. It also said MAS is considering recognition for a limited number of foreign stablecoins governed by comparable overseas regulatory frameworks, and that the proposals would implement a framework first finalized in 2023.
In parallel, the MAS framework would continue to treat stablecoins outside the MAS-SCS label as Digital Payment Tokens under the Payment Services Act, keeping them under existing consumer protection requirements. Ho Hern Shin linked the regulatory guardrails to tokenized financial markets, saying “Trusted and well-regulated stablecoins can serve as a credible settlement asset in tokenised financial markets, while mitigating risks to users and the broader financial system.”