Singapore Considers Recognizing Foreign-Issued Stablecoins in Policy Shift

Singapore’s central bank is reconsidering its rule limiting regulated stablecoins to domestic issuance. The Monetary Authority of Singapore launched a public consultation this week, proposing legal changes that could let jointly issued cross-border tokens qualify for its regulatory framework, along with other updates reflecting changes in the market since 2023.

Jointly Issued and Foreign Tokens Under Review

One proposal would let stablecoins issued jointly by a Singapore-based company and an overseas partner be labeled “MAS-regulated stablecoins” if risks are properly managed. The authority is also weighing recognition of select foreign-issued stablecoins already regulated under similar overseas rules, citing their usefulness in cross-border wholesale payments. This marks a shift from 2023, when MAS required qualifying stablecoins to be issued solely within Singapore, citing difficulties verifying overseas reserves and tracing mixed token origins.

New Safeguards Proposed for Issuers

The consultation also proposes amending the Payment Services Act to enforce reserve backing, capital requirements, par-value redemption, and issuer disclosures. Only licensed issuers could use the “MAS regulated” label. MAS also wants to ban interest payments on regulated stablecoins and require stress testing and wind down planning. Public feedback is open until October 16.