Singapore’s Monetary Authority of Singapore (MAS) has reaffirmed that stablecoins may be used for payments but should not be marketed to the public as investment products or yield-generating instruments similar to bank deposits.
“MAS’s stance remains that while stablecoins may be used for payments, they should not be used by the public as investment products or for the generation of yield, akin to bank deposit,” the bill states.
The position is part of MAS’s latest consultation on a proposed regulatory framework for stablecoins. The framework is intended to support the use of reliable, well-regulated stablecoins in tokenized financial markets while limiting risks to users and the wider financial system.
“Trusted and well-regulated stablecoins can serve as a credible settlement asset in tokenized financial markets, while mitigating risks to users and the broader financial system,” said Ho Hern Shin, MAS deputy managing director for financial supervision.
Limited recognition for some foreign stablecoins
The consultation also proposes limited recognition for a small number of foreign stablecoins regulated under comparable overseas frameworks. MAS has not yet determined how that recognition would operate in practice, how responsibilities would be allocated for jointly issued tokens or whether transitional arrangements would apply to existing issuers based in Singapore.
MAS first consulted on its proposed stablecoin rules in October 2022 and published its response to feedback in August 2023. The latest consultation closes on Oct. 16. The central bank will consult separately on subsidiary legislation at a later date, and no implementation date has been announced.
Stablecoins tested in Singapore
The proposed rules come as regulated stablecoins are already being tested in Singapore. Ripple is exploring whether its RLUSD stablecoin can replace manual payment processes that have slowed cross-border trade for decades through Singapore’s central bank sandbox, a controlled environment where companies test new financial technology.
The testing forms part of BLOOM, an MAS initiative designed to expand settlement capabilities for tokenized bank liabilities and regulated stablecoins.
