Singapore Moves to Ban Stablecoin Yield, Matching US and EU Rulebooks

Singapore proposes full reserve backing for stablecoin issuers

The Monetary Authority of Singapore (MAS) published a consultation paper on 1 September 2026. It proposes amendments to the Payment Services Act 2019. The proposed rules would require stablecoin issuers to hold reserve assets equal to at least 100% of all tokens in circulation at all times. Issuers would keep these reserves in accounts separate from their own funds, custodied only with licensed financial institutions. The plan would also let holders redeem a Singapore-regulated stablecoin at its full value. It would require issuers to safeguard funds while a redemption is pending. MAS is Singapore's central bank and financial regulator.

Proposed rules bar issuers from paying stablecoin yield

The proposal would prohibit issuers from paying interest or other benefits tied to customers' stablecoin holdings. MAS said stablecoins should serve payments, not act as investment products or generate yield like a bank deposit. The regulator described the approach as aligned with international practice. The United States GENIUS Act and the European Union's Markets in Crypto-Assets (MiCA) regulation both ban stablecoin issuers from paying interest or yield.

"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", 1 September 2026. — Ho Hern Shin, Deputy Managing Director (Financial Supervision), Monetary Authority of Singapore

New safeguards add stress tests and wind-down plans

MAS proposed extra safeguards for issuers that seek the regulated label. Issuers would run stress tests and keep recovery and orderly wind-down plans in case they meet financial or operational trouble. The regulator also proposed protections for money received from customers before the matching stablecoins are issued. These measures would sit alongside existing standards on capital, value stability and disclosure.

Consultation weighs recognition of some foreign stablecoins

The consultation also covers limited recognition of a small number of foreign stablecoins governed by comparable overseas frameworks. MAS has not decided how that recognition would work. It has also not settled how to divide responsibility for jointly issued tokens, or whether transitional arrangements would apply to existing Singapore issuers. MAS said the recognition would focus on wholesale, cross-border use. The consultation closes on 16 October 2026. MAS plans to consult on subsidiary legislation separately and has set no implementation date.

Framework builds on rules finalised in 2023

MAS first consulted on its stablecoin framework on 26 October 2022 and published its response to feedback on 15 August 2023. The framework applies to single-currency stablecoins issued in Singapore and pegged to the Singapore dollar or a G10 currency. Only licensed issuers may market their tokens as MAS-regulated stablecoins. Stablecoins outside the framework would stay classed as digital payment tokens and face Singapore's existing consumer-protection rules for crypto.

USDC holds its dollar peg under tighter global rules

USDC, a dollar stablecoin regulated under MiCA and the GENIUS Act, traded at $1.00 at the time of publication, with a market capitalisation of about $73.4 billion (CoinPaprika, 1 September 2026). Its 24-hour trading volume reached about $17.1 billion (CoinPaprika, 1 September 2026). The price held its one-dollar peg through the session. Those two rulebooks are the reference points MAS cited for its own approach.

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