Singapore Proposes Stablecoin Rules for Foreign Issuers, Interest Bans and Wind-Down Plans

Singapore’s central bank just proposed the most detailed stablecoin rulebook upgrade yet — targeting foreign issuers, banning interest payments, and forcing firms to plan their own orderly shutdowns. The Monetary Authority of Singapore (MAS) published the consultation on Sept. 1, and if you hold stablecoins or use them to move money, the details matter far beyond this small island nation.

By Raj Patel | September 1, 2026

The Hook: Singapore Wants Its Label to Mean Something

MAS has proposed amendments to the Payment Services Act 2019 that would write its stablecoin regulatory framework directly into law. The framework itself is not new — MAS finalized the core rules in 2023 after consultations that began in 2022 — but what is new is how far the rules would now reach. The proposals cover jointly issued foreign and Singapore stablecoins, a recognition route for a limited number of overseas tokens, an outright ban on paying interest to stablecoin holders, and mandatory stress testing and wind-down planning for regulated issuers.

Public feedback is open until Oct. 16, according to the MAS consultation. The regulator is asking the industry how issuers can qualify under its Single-Currency Stablecoin framework and — crucially — who gets to use the “MAS-regulated stablecoin” label.

The Regulatory Evidence: What the New Rules Would Actually Do

According to the consultation, the proposals would extend the 2023 framework into areas that have grown in importance as stablecoins became a bigger part of payments and tokenized financial markets. Here is what MAS is putting on the table:

• Joint foreign issuance — a stablecoin issued together by a Singapore entity and a foreign issuer could qualify as MAS-regulated, provided risks linked to issuing across different jurisdictions are sufficiently addressed.
• Foreign stablecoin recognition — MAS is considering recognizing a limited number of stablecoins issued entirely outside Singapore, if they are supervised under a regulatory framework MAS considers comparable to its own. Recognition would focus on cross-border wholesale uses.
• Interest ban — regulated stablecoins would be prohibited from paying interest to holders. A stablecoin is supposed to be a payment tool, not a yield product.
• Stress tests and wind-down plans — issuers would need to conduct stress tests and maintain recovery plans plus orderly wind-down requirements if they run into financial or operational trouble.
• Pre-issuance safeguards — MAS is seeking feedback on protections for customer money received before stablecoins are issued, similar to requirements that already apply to Payment Services Act licensees.

The existing core requirements would stay: standards covering value stability, capital, redemption at par, and disclosures to users. And only licensed issuers would be allowed to market their tokens as “MAS-regulated stablecoins” — a designation designed to separate tokens that meet MAS requirements from crypto assets merely marketed as stablecoins.

The Core Conflict: Interest Ban vs. the Yield-Driven Stablecoin Market

The proposed interest ban is the most contentious piece. A large share of stablecoin demand today is driven by the chance to earn yield — whether through lending products, reward programs, or interest-bearing tokenized deposits. Tether CEO Paolo Ardoino has publicly clashed with the Bank for International Settlements over exactly this question, arguing stablecoins and tokenized deposits are competing visions for the future of on-chain money.

MAS has effectively picked a side: a regulated stablecoin in Singapore should behave like digital cash — stable, redeemable at par, and boring. Yield, in the regulator’s view, turns a payment instrument into something closer to an investment product, with the risks that entails. MAS Deputy Managing Director for Financial Supervision Ho Hern Shin said the legislative changes would establish regulatory guardrails for stablecoins that meet the regulator’s requirements for value stability and governance.

“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,” Ho said in the consultation announcement.

Market Implications: Why This Matters Beyond Singapore

Singapore is one of the world’s most watched financial regulators, and its rules tend to get copied. The foreign-issuer recognition route is the part global markets will study hardest, because it sketches a template for how a major regulator could allow overseas stablecoins to circulate for wholesale purposes without ceding supervision. Expect other regulators — and the big stablecoin issuers — to file detailed responses before the Oct. 16 deadline.

Stablecoins that fall outside the framework would continue to be treated as Digital Payment Tokens under the Payment Services Act, where consumer safeguards already restrict trading incentives, financing, and leverage, and limit locally issued credit card payments for crypto purchases. Singapore has separately tightened rules for crypto businesses providing those services.

The Verdict: What This Means for You

If you are a retail holder, the practical takeaway is a cleaner signal: an “MAS-regulated stablecoin” label will mean the issuer passed tests for reserves, redemption, and capital — and does not promise you interest. That reduces the chance of the silent risks that have burned stablecoin users before. If you chase yield on your stablecoins, Singapore is telling you to do it somewhere else, through products that are regulated as what they actually are: investments.

For the industry, the Oct. 16 feedback deadline and the eventual legislation will shape whether Singapore becomes the home base for the next generation of compliant stablecoins — or just the strictest corner of a market that grows up elsewhere.

The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.