Singapore proposes 100% reserves and a ban on yields for stablecoin issuers
The Monetary Authority of Singapore (MAS) has proposed strict regulations for stablecoin issuers, including a 100% reserve requirement and a ban on offering interest or yield. These rules aim to ensure stablecoins function as payment instruments rather than speculative investment products.
Why it matters
This regulatory move signals a global trend toward treating stablecoins as financial utilities rather than high-yield crypto assets, impacting the broader digital asset market.
The Monetary Authority of Singapore’s (MAS) proposed rules would require issuers to maintain assets equal to at least 100% of all tokens in circulation at all times, in accounts separate from issuers’ own funds and custodied only with licensed financial institutions.
The rules would give holders greater protection when redeeming a Singapore-regulated stablecoin by requiring issuers to maintain sufficient reserve assets and to safeguard funds pending redemption. MAS said in a consultation paper that stablecoins should be used for payments, not by the public as investment products or to generate yield.
The new rules would also bar stablecoin issuers from paying interest or other benefits tied to customers’ stablecoin holdings, an approach the MAS states “is aligned with international regulatory practices.” The U.S. GENIUS Act and the European Union’s Markets in Crypto-Assets (MiCA) regulation explicitly ban stablecoins from paying interest or yield.
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