MAS consults on legislative amendments to implement the stablecoin regulatory framework

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DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

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MAS Consults on Legislative Amendments to

Implement the Stablecoin Regulatory Framework

On 1 September 2026, the Monetary Authority of Singapore (MAS) launched a consultation seeking feedback on proposed legislative amendments to the Payment Services Act 2019 (PS Act) to implement

MAS’ regulatory framework for stablecoins in Singapore, being the MAS Single-Currency Stablecoin framework (MAS-SCS Framework). It also covers proposals on further requirements taking into account stablecoin developments since 2023.1 The consultation closes on 16 October 2026.

The proposed legislative amendments will set out how stablecoin issuers may qualify to be MAS-regulated, and the safeguards they must meet to support value stability and user protection. The MAS-SCS

Framework permits only issuers licensed under the framework to describe themselves as licensed MAS-regulated stablecoin issuers and represent their stablecoins as “MAS-regulated stablecoins”. Non-MAS-regulated stablecoins will be treated as Digital Payment Tokens (DPTs) and be subject to the consumer protection safeguards that apply to DPTs.

The consultation seeks feedback on:



Key requirements relating to value stability, capital, redemption at par and disclosure; and



Policy positions in further areas, taking into account recent developments and best practices in stablecoin regulation internationally. These include multi-jurisdictional issuance of stablecoins, recognition of foreign-issued stablecoins, additional requirements to safeguard financial stability, and additional consumer protection safeguards.

MAS will consult on the subsidiary legislation at a later date.

We highlight below the key features of the MAS-SCS Framework as set out in MAS’ press release and the consultation paper (Consultation Paper).

Summary of Key Legislative Amendments to the PS Act

Definition of stablecoin

MAS is proposing to introduce new definitions and related provisions to give effect to the MAS-SCS

Framework, including new definitions for terms such as “stablecoin” and “MAS-regulated stablecoin”.

Amendments to section 2(1) of the PS Act will clarify that stablecoins fall within the broader category of

DPTs for the purpose of regulation under the PS Act, unless otherwise expressly provided. Corresponding amendments will be made to the definition of “e-money” to more clearly distinguish between “e-money”

1

MAS first consulted on its proposed MAS-SCS Framework on 26 October 2022 and published its response on 15 August 2023, setting out the finalised regulatory approach.

Stablecoins

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DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

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and “stablecoin”, and to clarify that fiat-pegged stablecoins do not constitute e-money for the purposes of the PS Act.

MAS seeks feedback on: (a) the proposed definition of “stablecoin”; (b) whether these amendments provide sufficient clarity to distinguish stablecoins from e-money; and (c) other proposed amendments to section 2(1) of the PS Act.

Licensing of persons who hold themselves out as issuers of MAS-regulated stablecoins

A new licence class of “stablecoin issuance” will be introduced. Persons granted a licence for MAS-regulated stablecoin issuance may hold themselves out as an issuer of an MAS-regulated stablecoin. Those without this licence will be prohibited from doing so. Issuance would include incidental activities such as minting, putting into circulation MAS-regulated stablecoins, managing the reserve assets, redeeming the

MAS-regulated stablecoins at par, and such other incidental activities that MAS may prescribe. All regulatory obligations will be placed on the licensed issuer.

Core obligations include maintaining reserve assets at least equal to the par value of all stablecoins in circulation, and fulfilling redemption requests in the pegged currency within MAS-prescribed timeframes.

Customers’ funds must be safeguarded until stablecoins are delivered. Issuers will also be subject to existing anti-money laundering/countering the financing of terrorism (AML/CFT), technology risk, consumer protection and other requirements under the PS Act. To mitigate potential contagion risk, issuers will not be allowed to conduct other regulated activities beyond the issuance of MAS-regulated stablecoins. However, issuers may, without a separate licence, provide DPT services in respect of their issued MAS-regulated stablecoins, where this is incidental to the MAS-regulated stablecoin business.

In addition, MAS seeks feedback on the proposed amendments to Part 2, Divisions 1 and 2, and to the First

Schedule.

Additional Requirements for Issuance of MAS-Regulated Stablecoins

Several areas of enhancement to the MAS-SCS Framework are proposed, particularly to safeguard consumer interests and financial stability. Key proposals include:

(a)

Prohibition of interest: Issuers will be prohibited from paying interest, return, or any other benefit to a holder that is directly or indirectly attributable to the holding or balance of MAS-regulated stablecoins. The prohibition is not intended to apply to revenue-sharing, distribution, service or other commercial arrangements between the issuer and a third party.

(b)

Prohibition on use of customer monies and interest earned: Currently, section 20(2) of the PS

Act prohibits e-money issuers from on-lending monies received from customers and from using those monies and the interest earned on them to wholly or materially finance any business activity.

MAS seeks feedback on whether the prohibition on use of interest earned on customers’ monies is required, and if so, how the restrictions should be calibrated.

(c)

Potential requirement for minimum proportion of reserve assets in cash or deposits: MAS is considering a potential requirement for a minimum proportion of reserve assets to be held in cash or

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DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

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bank deposits to enhance value stability and manage unforeseen peaks in redemptions under stress scenarios, and seeks feedback on potential thresholds.

(d)

Potential caps: MAS seeks feedback on the usefulness, scope of application and appropriate limits of holding and aggregate issuance limits, noting that an issuer-specific aggregate cap on issuance size may contain the impact of a failure of the stablecoin issuer.

Additional consumer protection requirements

The Consultation Paper proposes safeguarding obligations on issuers, similar to those imposed on existing

PS Act licensees. Where an issuer receives money intended for the purchase of MAS-regulated stablecoin, the issuer must immediately safeguard those monies until the intended holder receives the stablecoin.

Similar safeguarding requirements will apply where money is due to be paid for stablecoin redemptions but is not yet received by the holder.

MAS proposes that any issuer exiting the MAS-SCS Framework, whether by revocation, lapse or surrender of its licence, be disallowed from conducting all issuance business, including that relating to non-MAS-regulated stablecoins. This prohibition will apply even if the issuer subsequently obtains a DPT service licence.

MAS also seeks feedback on an alternative option requiring such issuers to wind down their business and/or wind up their entity. In addition, issuers should not dispose of reserve assets for purposes other than fulfilling redemptions until MAS is reasonably satisfied that there are no outstanding redemption requests.

Additional risk management requirements

Issuers should conduct regular stress testing to ensure that their reserve assets and redemption mechanisms remain robust under adverse market conditions. Such testing should incorporate both idiosyncratic and systemic shocks. MAS proposes that MAS-SCS issuers conduct such stress testing at least quarterly. Scenarios, assumptions, methodologies and results should be reviewed at board level, documented in risk management frameworks, and shared with MAS. Where stress testing results reveal critical vulnerabilities, MAS may impose additional capital, liquidity, or reserve buffers.

Issuers will also be required to set out structured steps for recovery and orderly wind-down as part of their risk management frameworks. Recovery plans must provide for timely recovery and continuity of critical functions in the event of a significant disruption. Orderly wind-down plans must include detailed steps, resources and the timeline required for winding down the business upon specific trigger scenarios. Both must be reviewed regularly, approved at board level and shared with MAS at least annually.

MAS also proposes to amend the definition of “pertinent financial institutions” in the Financial Services and

Markets Act 2022 (FSMA) to include licensed issuers of MAS-regulated stablecoins.

Separately, MAS proposes to require issuers to have in place technical capabilities to trace, freeze and/or burn the issued stablecoins if they are found to be used for or in support of illicit activities. Specific requirements will be set out by way of a Notice.

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DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

WongPartnership LLP (UEN: T08LL0003B) is a limited liability law partnership registered in Singapore under the Limited Liability Partnerships

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In addition, MAS seeks feedback on the feasibility of potential AML/CFT measures such as requiring verified identification of every holder, restricting the use of unhosted wallets, and monitoring the stablecoins in circulation on an ongoing basis.

Framework for Designated Systemic Stablecoins

MAS will be introducing powers to designate a stablecoin as a “Designated Systemic Stablecoin”, regardless of whether it is issued in or outside Singapore, and whether the stablecoin and its issuer are regulated under the MAS-SCS Framework.

A new Division 2 under Part 2A will empower MAS to designate a stablecoin as systemic where designation is necessary to prevent systemic risk events or systemic disruption to Singapore’s financial system, or is otherwise in the interests of the public. MAS may also withdraw a designation. In determining whether a stablecoin should be designated as systemic, MAS will consider factors such as the size of the stablecoin in circulation, interconnectedness with payment systems in Singapore, interconnectedness with the broader financial system in Singapore, and substitutability of the stablecoin.

As part of this regime, stablecoin issuers and licensed intermediaries will be required to provide MAS with information relating to stablecoins circulating within Singapore, such as the value, volume and frequency of issuance and redemption, as well as partnerships with DPT intermediaries. This requirement will apply to all issuers of tokens that purport to maintain a value relative to a reference asset or basket of assets, even if they are not marketed as “stablecoins”.

Once designated, issuers must comply with requirements including key requirements of the MAS-SCS

Framework, particularly in relation to reserve assets, redemption requirements for a direct legal claim at par, prudential requirements and white paper issuance. Enhanced requirements will also apply, in line with

Financial Stability Board recommendations. Issuers are expected to have in place a recovery plan, and MAS may require a designated systemic stablecoin issuer to undergo resolution. MAS’ existing emergency powers under Part 5 of the PS Act will be extended to such issuers, and the FSMA will be amended to bring them within the definition of “financial institution”.

Where an issuer of a designated stablecoin fails to meet MAS’ requirements, MAS will be empowered to prohibit or suspend the circulation of the stablecoin in Singapore. This includes directing licensed DPT service providers to cease offering the stablecoin, to delist it and related trading pairs, and to prohibit further accumulation by customers.

Regulatory Approach for Stablecoins Issued Offshore

Multi-jurisdictional issuance of stablecoins

Stablecoins issued in a multi-jurisdictional issuance arrangement involve the issuance of the same fungible stablecoin by related or affiliate issuing entities operating in different jurisdictions. MAS is prepared to allow stablecoins to be issued concurrently from Singapore and one or more foreign jurisdictions, and for the issuer to hold out the stablecoin as “MAS-regulated”, provided there is assurance that the risks are sufficiently mitigated. The Singapore-incorporated issuer will be required to apply for a stablecoin issuance licence and to comply with the MAS-SCS Framework, save for: (a) the requirement to be incorporated in

Singapore; and (b) the requirement to hold reserve assets equal to or exceeding the value of stablecoins in

© WongPartnership LLP

DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

WongPartnership LLP (UEN: T08LL0003B) is a limited liability law partnership registered in Singapore under the Limited Liability Partnerships

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circulation. A new section 100A of the PS Act will empower MAS to grant exemptions from these requirements on a case-by-case basis, subject to conditions.

Key safeguards proposed include:

(a)

Status of foreign issuer and its regulatory regime: Foreign issuers must be supervised under a stablecoin regulatory regime that MAS deems substantively equivalent to the MAS-SCS Framework.

MAS will also consider whether a comprehensive bilateral agreement is in place with the foreign supervisory authority to facilitate information sharing and supervisory cooperation.

(b)

Reserve asset requirements: The composition of reserve assets held by all issuing entities should meet the stricter of the requirements under the MAS-SCS Framework or those imposed by the competent authority of the foreign issuer. The value of reserve assets held by all issuing entities must be equivalent to at least 100% of the par value of outstanding stablecoins in circulation at all times. Reserve assets must be held in segregated accounts on trust. The amount held by the

Singapore issuer relative to the amount held by the offshore issuer must be risk-proportionate, with safeguards such as reserve rebalancing arrangements or stablecoin attribution models approved by

MAS prior to issuance.

(c)

Comparable terms of issuance and redemption: The rights of all holders should be comparable across all issuing entities, including redemption fees and redemption timelines, and the issuer should meet the stricter of the regulatory requirements across the relevant jurisdictions.

(d)

Plans for recovery and orderly wind-down: The recovery plan should explicitly consider how it is to be implemented across all issuing entities. An issuer exiting the MAS-SCS Framework while maintaining issuance in remaining jurisdictions must ensure there are no outstanding redemption requests prior to exit. MAS is considering whether such an issuer should be required to wind up its formerly MAS-regulated entity.

Recognition for foreign-regulated stablecoins

MAS proposes to recognise a limited number of foreign-issued stablecoins on a case-by-case basis, provided it is satisfied that they are well-regulated for value stability on an ongoing basis. The issuer and its stablecoin must be regulated under a foreign regulatory framework deemed substantively equivalent to the

MAS-SCS Framework, and supervisory cooperation and information sharing agreements must be in place between MAS and counterpart competent authorities. These conditions will be set out in subsidiary legislation. Stablecoins that meet these requirements can then be held out as “recognised” foreign-issued stablecoins or under a similar title.

MAS also seeks feedback on the proposed addition of Part 2B to the PS Act and on the factors to be taken into consideration prior to recognition.

Further Clarifications on Regulatory Approach to Stablecoins

Retail protections for non-MAS-regulated stablecoins

MAS is considering imposing requirements on licensed DPT service providers (DPTSPs) who offer non-MAS-regulated “stablecoins” to their customers, including any non-MAS-regulated DPT that purports to

© WongPartnership LLP

DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

WongPartnership LLP (UEN: T08LL0003B) is a limited liability law partnership registered in Singapore under the Limited Liability Partnerships

Act 2005.

maintain a stable value even if its issuer does not call it a “stablecoin”. The requirements considered include requiring licensed DPTSPs to provide enhanced disclosures to retail customers on the reserve assets backing such tokens, provide clear risk warnings to retail customers that these DPTs are not regulated by MAS for value stability, and refrain from marketing such tokens to retail customers using the term “stablecoin”.

MAS also seeks feedback on these requirements and on what a sufficient transition period would be.

Regulatory approach for banks

Banks and merchant banks (MBs) that wish to issue MAS-regulated stablecoins will be required to set up a separate non-bank legal entity to issue the stablecoin in accordance with the MAS-SCS Framework. This limits contagion risk to the bank and provides greater certainty that the reserve asset segregation requirement will be met. Banks and MBs may still issue tokenised deposits, and MAS will issue guidance on this in due course. Banks and MBs planning to issue such tokens are encouraged to engage MAS early before issuance.

Wholesale banks (WBs) and MBs are subject to a restricted depositor scope. It remains MAS’ position that the restricted depositor scope similarly applies to persons who may purchase, hold or otherwise access single-currency stablecoins issued by WBs, MBs and any related entity through which they issue Singapore dollar stablecoins. This applies whether such persons acquired their stablecoins directly or in the secondary market. Such entities would therefore be effectively prohibited from issuing Singapore dollar stablecoins that can be traded freely by retail individuals, but may issue stablecoins that can support wholesale use cases.

MAS also seeks any other comments relating to the proposed amendments and to its regulatory approach towards stablecoins and stablecoin-related activities.

Submission of Comments

A full list of the consultation questions is set out in Annex B to the Consultation Paper. The full suite of draft legislative amendments to the PS Act is published on MAS’ website as Annex C. MAS invites interested parties to submit written comments by 16 October 2026 via this FormSG link.

If you would like information and/or assistance on the above or any other area of law, you may wish to contact the Partner at WongPartnership whom you normally work with or any of the following Partners:

Elaine CHAN

Co-Head – Financial Services Regulatory

TIAN Sion Yoong

Partner – Financial Services Regulatory

CHAN Jia Hui

Partner – Financial Services Regulatory

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