The Monetary Authority of Singapore (MAS) is reviewing its policy on stablecoins issued across multiple jurisdictions, proposing a path for certain jointly issued tokens to be recognized within its official framework.
Consultation on Stablecoin Policy
On Tuesday, MAS launched a public consultation on suggested legislative amendments that would bring its stablecoin framework into effect. The consultation includes additional policy proposals intended to address market changes and technological developments since 2023.
One key proposal would allow stablecoins issued jointly by a Singapore-based entity and a foreign partner to qualify as “MAS-regulated stablecoins.” Eligibility would depend on whether associated risks are sufficiently mitigated according to the authority’s requirements.
MAS is also considering limited recognition of certain foreign-issued stablecoins, but only those that are regulated under comparable frameworks overseas. The regulator pointed out the potential use of these stablecoins in cross-border wholesale transactions, which could encourage more streamlined international transfers.
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AAPLRevisiting the 2023 Policy
These new proposals represent a shift from MAS’s 2023 decision that only stablecoins issued solely in Singapore would qualify for its regulatory regime. The previous framework applied to single-currency stablecoins issued in the country and pegged either to the Singapore dollar or a G10 currency.
In restricting the scope in 2023, MAS cited challenges in ensuring regulatory equivalence and maintaining effective supervisory cooperation with foreign authorities. Technical difficulties in tracking commingled origin, and uncertainty over the adequacy of overseas reserves for redemptions, were also highlighted as key reasons for the initial limits.
Stablecoins jointly issued by Singapore and foreign entities could be recognized as “MAS-regulated stablecoins,” provided risk controls are in place, according to the latest proposals. MAS also aims to include some foreign stablecoins under comparable regulatory standards, where they could be used for cross-border wholesale settlements.
MAS now seeks to integrate these changes into the Payment Services Act (PSA), which forms the legal foundation for regulating payment services and operators in Singapore.
Additional Regulatory Safeguards
Other proposed measures include a ban on interest payments for regulated stablecoins. Issuers would also be required to conduct routine stress tests and establish recovery as well as orderly wind-down plans to protect market integrity and consumer interests.
Enhanced consumer protection rules would mandate issuers to safeguard client funds before issuing corresponding stablecoins. Those stablecoins not covered by the dedicated framework will remain classified as digital payment tokens under the existing regulatory structure.
While traditional markets have long depended on complex brokers, MAS’s proposals coincide with a broader transition in financial markets towards Web3. Major institutions on Wall Street are increasingly exploring direct exposure to real-world assets (RWAs) in tokenized form. Investors are turning to platforms like 1stepSwap, which enable them to hold shares of large U.S. companies, gold, and silver within their crypto wallets by tokenizing RWAs and executing trades at optimal prices in seconds, removing traditional intermediaries from the process.
MAS will accept public feedback on the proposed amendments until October 16.
