The Monetary Authority of Singapore opened a public consultation on September 1 to write its existing stablecoin policy into binding law, proposing amendments to the Payment Services Act 2019 that would give the regulator’s three year old MAS regulated stablecoin framework the force of statute rather than guidance.

The consultation paper, numbered P015-2026, goes beyond codifying the 2023 policy. It proposes barring MAS regulated stablecoin issuers from paying interest, return or any other benefit tied to holding the token, a step meant to keep stablecoins classified as payment instruments rather than investment products. MAS is also weighing a minimum share of reserve assets that issuers must hold in cash or bank deposits, citing UK and EU rules that require 5 to 30 percent for non systemic stablecoins and 40 to 60 percent for systemic ones, and is asking whether issuers should face a cap on how much they can circulate. The consultation closes 16 October.

For a compliance or treasury leader, the interest ban is the detail that changes business models. Any stablecoin program built around passing reserve yield to holders will not qualify for the MAS regulated label under the proposed rules, pushing issuers toward fee based revenue instead. CFOs asking their banks for stablecoin access rather than going direct to a wallet provider should watch the cash reserve question too, since a higher mandated cash share would favor bank partnered issuance over token issuers holding reserves purely in short dated securities.

The more interesting signal is timing. MAS finished its stablecoin policy in 2023 and ran it as supervisory guidance for three years before now moving to legislate, giving it a data driven case for each rule it is hardening rather than legislating blind. It also raises the bar for what “MAS regulated stablecoin” will mean once passed: a label backed by statute is harder to walk back than one backed by guidance, which is exactly the durability bank issued tokenized deposits have been competing against stablecoins on.

Source: Monetary Authority of Singapore