MAS Consults on Stablecoin Legislation, Reversing Multi-Jurisdiction Issuance Stance

The Monetary Authority of Singapore (MAS) has opened a public consultation on amendments to the Payment Services Act that would enshrine its 2023 stablecoin framework in statute. The most consequential shift is a reversal of the multi-jurisdiction issuance position: where MAS previously held that a stablecoin issued simultaneously from Singapore and overseas could not qualify as “MAS-regulated”, the regulator now proposes to permit that label where the foreign issuer operates under a substantively equivalent regime and appropriate safeguards are in place.

The consultation also presses into the business economics of stablecoin issuance, territory few regulators have entered explicitly. Draft regulations would bar issuers from using customer monies, or the interest earned on those monies, to materially fund their operations. Since reserve interest constitutes the dominant revenue line for most standalone stablecoin issuers, MAS acknowledges the tension openly and asks respondents whether such a prohibition is necessary at all and, if retained, how it should be calibrated.

Three further elements round out the proposed amendments: a designation regime for systemically significant stablecoins, a recognition pathway for stablecoins already regulated in foreign jurisdictions, and a requirement that banks wishing to issue stablecoins do so through separate legal entities. Responses to the consultation are due by 16 October.