Proposal · Comments close · Applies to Stablecoin issuers, VASPs
MAS published draft amendments to the Payment Services Act to create a stablecoin issuance licence for single-currency stablecoins pegged to the Singapore dollar or a G10 currency. The draft also proposes a ban on paying interest, joint issuance with foreign issuers, recognition of some foreign-regulated stablecoins, and powers to designate and restrict systemic stablecoins. Comments close on 16 October 2026.
Why it matters: Singapore is turning a 2023 policy into law and adding powers over stablecoins it does not license, which is where the real market is.
For Ethereum: Licensed issuers would need the technical ability to trace, freeze and burn their stablecoins on-chain; MAS is also weighing, but not yet proposing, limits on unhosted wallets.
The consultation paper would add a “stablecoin issuance” licence class to the Payment Services Act (para 2.6). Only licensees could call their tokens “MAS-regulated stablecoins”. Other stablecoins would be treated as digital payment tokens.
Core obligations carry over from the 2023 policy: reserves at least equal to par value, redemption in the pegged currency within set timeframes, and no other regulated business in the issuing entity (paras 2.9 to 2.10). New proposals include:
A ban on paying interest or returns to holders (para 3.2).
Stress testing, recovery and orderly wind-down plans (paras 3.16 onwards).
Technical ability to trace, freeze or burn stablecoins used for illicit activity, with details to follow in a Notice (para 3.22).
Powers to require information from all issuers of tokens that claim to hold a stable value, and to designate a stablecoin as systemic whether or not it is issued or licensed in Singapore (paras 4.1 to 4.3). MAS could then direct licensed crypto service providers to stop offering or delist a systemic stablecoin that fails its requirements (para 4.9).
Joint issuance from Singapore and a foreign jurisdiction under the MAS label, with safeguards on the shared reserve pool (paras 5.1 to 5.4).
Recognition, case by case, of a limited number of foreign stablecoins regulated under an equivalent regime (paras 5.12 to 5.14).
Implications
The framework remains voluntary for issuers. The systemic designation power is what reaches the large offshore stablecoins that dominate trading in Singapore, and it works through the intermediaries MAS already licenses.
The interest ban puts Singapore alongside the United States and the European Union, and rules out yield-bearing designs from the MAS label. Joint issuance and recognition are new since 2023 and open a path for global issuers that cannot move their whole reserve pool to Singapore.
For Ethereum
The major fiat-backed stablecoin contracts on Ethereum already include freeze or blacklist functions, so the trace, freeze and burn requirement changes little in practice. The open question 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 more is needed. If Singapore adopted wallet restrictions, MAS-regulated stablecoins would become less usable in self-custody and in DeFi.
Elsewhere in Asia
Hong Kong licensed its first two issuers in April under a law already in force. The foreign recognition route could, in time, cover Hong Kong’s licensed stablecoins.
What to watch
The comment deadline of 16 October 2026, the Notice on trace and freeze capabilities, and the bill itself.