Weekly Brief No. 1 ·
Singapore drafts its stablecoin law, and asks how far on-chain controls should go
MAS published draft amendments that would put its stablecoin framework into law, including a duty on issuers to trace, freeze and burn tokens on-chain. For stablecoins on Ethereum, the question MAS left open is whether holders' wallets will also be restricted.
In the week of 31 August 2026 the Monetary Authority of Singapore (MAS) published draft amendments to the Payment Services Act that would turn its 2023 stablecoin policy into law. The draft requires licensed issuers to be able to trace, freeze and burn their tokens on-chain, and leaves open whether Singapore will go further and restrict the wallets that may hold them. Ethereum core developers, meanwhile, were settling the testnet schedule for the Glamsterdam upgrade.
Stablecoins on Ethereum under Singapore law
On 1 September 2026 MAS opened a consultation on amendments to the Payment Services Act 2019. The consultation paper adds a “stablecoin issuance” licence class, and only licensees could call their tokens “MAS-regulated stablecoins” (para 2.6). Every other stablecoin would stay a digital payment token. Comments close on 16 October 2026. The Regulatory Wire item sets out the full proposal.
Two provisions decide how a MAS-regulated stablecoin would work on a public chain such as Ethereum.
The first is a duty to hold the technical ability to trace, freeze or burn stablecoins used for illicit activity, with the details to follow in a separate MAS Notice (para 3.22). In a token contract, that means an issuer-controlled function that can stop a given address from moving tokens and can destroy tokens held there. The major fiat-backed stablecoin contracts on Ethereum already have freeze or blacklist functions, so for most issuers this writes existing practice into law.
The second is paragraph 3.23. MAS lists measures other jurisdictions have considered, including verified identity for every holder and restrictions on unhosted wallets, and says it will assess whether Singapore needs more than trace, freeze and burn. It makes no proposal yet.
Hong Kong shows what the stricter version looks like. HKDAP, the Hong Kong dollar stablecoin that Anchorpoint Financial issues under one of the first two HKMA licences, runs on Ethereum mainnet, but every holder’s wallet must first be whitelisted by an authorised distributor, according to Anchorpoint’s user alert. The chain is public and the holder list is closed. A MAS-regulated stablecoin under paragraph 3.22 alone would be a public token that the issuer can freeze. Under the measures in paragraph 3.23 it would look more like HKDAP.
The draft also reaches stablecoins that Singapore does not license. MAS could require information from any issuer whose token claims a stable value, designate a stablecoin as systemic wherever it is issued (paras 4.1 to 4.3), and then direct licensed crypto service providers to stop offering or delist it (para 4.9). The power works through the exchanges MAS supervises rather than through the token contracts, which MAS cannot reach when the issuer is offshore.
Singapore should stop at trace, freeze and burn. Freezing acts on an address after the fact; a whitelist decides in advance which addresses may hold the token at all. The MAS label is voluntary, and a stablecoin without it remains a legal digital payment token (para 2.6). If the label comes with wallet restrictions, issuers can do without it, and the stablecoins people in Singapore hold will be the ones MAS does not license. Trace, freeze and burn gives MAS a tool against illicit funds without closing the token to self-custody and to DeFi. No issuer has said it would stay out of Singapore over wallet rules, so this rests on how a voluntary label works rather than on anyone’s stated plans. MAS’s response to the consultation, and its Notice on trace and freeze capabilities, will show which way it leans.
Technology
Ethereum’s next network upgrade, Glamsterdam, is moving to public testnets. The agenda for the 3 September consensus-layer developers’ call (ACDC #186) put a Sepolia testnet fork on 28 September, at epoch 351232, up for confirmation. The upgrade raises the gas cost of creating and reading contract state, and the Ethereum Foundation has asked contract maintainers to check code that relies on fixed gas amounts before it reaches mainnet. That applies to every stablecoin and tokenised-asset contract that institutions in the covered markets run on Ethereum mainnet.
On the site
- Regulatory Wire: MAS consults on Payment Services Act amendments to put its stablecoin framework into law (1 September).
What to watch
- The Global Fintech Fest in Mumbai, 8 to 11 September.
- Confirmation of the Glamsterdam Sepolia fork date.
- MAS’s comment deadline, 16 October 2026.