Singapore MAS Proposes Recognizing Foreign Stablecoins in New Consultation

Singapore's Monetary Authority (MAS) is considering allowing jointly issued cross-border stablecoins into its regulatory framework, marking a significant shift from its 2023 stance that restricted qualifying stablecoins to domestic issuance. On Tuesday, MAS opened a public consultation covering legislative amendments to implement its stablecoin framework alongside new policy proposals reflecting industry developments since 2023.

Under one proposal, stablecoins jointly issued by a Singapore-based issuer and a foreign counterpart could qualify as "MAS-regulated stablecoins," provided the associated risks are sufficiently mitigated. MAS is also weighing recognition of a limited number of foreign-issued stablecoins regulated under comparable overseas frameworks, citing their potential utility in cross-border wholesale transactions. This represents a notable reversal from MAS's earlier position, which cited difficulties in establishing regulatory equivalence and cooperation with other jurisdictions, as well as technical challenges in tracing commingled stablecoins and verifying overseas reserves.

The consultation proposes implementing the 2023 stablecoin framework through amendments to Singapore's Payment Services Act (PSA). Requirements would cover reserve-backed value stability, capital adequacy, redemption at par, and issuer disclosures. Only licensed issuers would be permitted to label their tokens "MAS-regulated stablecoins." MAS also proposed prohibiting issuers from paying interest on regulated stablecoins and mandating stress tests along with recovery and orderly wind-down plans.

Additional consumer safeguards would require issuers to protect customer funds received before the corresponding stablecoins are issued. Stablecoins falling outside the dedicated framework would continue to be classified as digital payment tokens under existing rules. The move positions Singapore to potentially become a more competitive hub for stablecoin innovation while maintaining regulatory rigor.