MAS Finalises Stablecoin Regulatory Framework The Monetary Authority of Singapore's finalized framework for single-currency stablecoins, establishing reserve requirements, redemption rights, and licensing standards for MAS-regulated stablecoins.
August 2023
Source: Monetary Authority of Singapore (MAS)

What Is Singapore's Stablecoin Framework?

The Monetary Authority of Singapore (MAS) finalized its regulatory framework for single-currency stablecoins (SCS) in August 2023. This framework establishes Singapore as one of the first jurisdictions globally to implement comprehensive stablecoin-specific regulation.

The framework applies to stablecoins pegged to the Singapore Dollar or any G10 currency, creating a tiered regulatory approach based on the issuer's activities and scale.

What Stablecoins Are Covered?

In-Scope Stablecoins

  • Single-currency stablecoins pegged to SGD
  • Single-currency stablecoins pegged to G10 currencies
  • Issued by entities licensed under the Payment Services Act
  • Stablecoins meeting minimum circulation thresholds

Out-of-Scope

  • Multi-currency or basket-backed stablecoins
  • Algorithmic stablecoins without reserve backing
  • Commodity-backed tokens
  • Stablecoins below circulation thresholds

What Are the Key Requirements?

Licensing

  • Major Payment Institution (MPI) license required
  • Minimum base capital of S$1 million
  • Higher capital for larger circulation amounts
  • Fit and proper management requirements

Operational Standards

  • Robust risk management framework
  • Business continuity planning
  • Cybersecurity requirements
  • Segregation of customer assets

What Are the Reserve Requirements?

Eligible Reserve Assets

  • Cash and cash equivalents
  • Short-term government securities (≤3 months maturity)
  • Deposits with licensed financial institutions
  • Denominated in the reference currency

Reserve Management

  • 100% backing at all times
  • Daily valuation requirements
  • Monthly independent attestation
  • Segregation from operational funds
  • Custody with regulated financial institutions

What Are the Redemption Requirements?

  • Redemption at face value guaranteed
  • Processing within 5 business days
  • No redemption fees beyond disclosed charges
  • Clear redemption procedures published
  • Minimum redemption amounts may be specified

What Disclosure Is Required?

  • Whitepaper with key stablecoin information
  • Reserve composition and audit results
  • Rights and risks clearly disclosed
  • Fee structures transparently published
  • Material changes promptly communicated

What Should Financial Institutions Consider?

Strategic Opportunities

  • Singapore as regional stablecoin hub
  • Clear regulatory pathway reduces uncertainty
  • MAS-regulated label provides credibility
  • Integration with Singapore's payment infrastructure

Compliance Investment

  • Reserve management systems and attestation
  • Redemption processing infrastructure
  • Regulatory reporting capabilities
  • Customer disclosure mechanisms

The Coinbax Perspective

Singapore's framework demonstrates that comprehensive stablecoin regulation and a business-friendly environment can coexist. The focus on single-currency stablecoins with clear reserve and redemption rules provides the certainty institutional participants need.

The MAS-regulated stablecoin label creates a quality tier in the market. For financial institutions, this framework offers a credible pathway to stablecoin services in one of Asia's premier financial centers.

Frequently Asked Questions

What makes a stablecoin “MAS-regulated”?

A stablecoin is MAS-regulated when issued by an MPI-licensed entity that complies with all framework requirements. Only these stablecoins can use the “MAS-regulated” designation in Singapore.

Can foreign stablecoins be used in Singapore?

Yes, but they cannot claim MAS-regulated status. Service providers dealing in non-MAS-regulated stablecoins must clearly disclose this to customers.

What are the capital requirements?

Minimum S$1 million base capital, with higher requirements based on the value of stablecoins in circulation and the specific payment services offered.