Highlights
- Singapore's Monetary Authority (MAS) has proposed barring licensed stablecoin issuers from paying any yield, interest or benefit tied to holding their tokens.
- The proposal would require 100% reserve backing at all times, held in segregated accounts with licensed financial institutions.
- Issuers would also need to run stress tests and maintain mandatory wind-down plans.
- The consultation closes October 16, 2026, and mirrors similar restrictions already in place or proposed in the US and EU.
Singapore's financial regulator wants to draw a hard line between stablecoins and yield-bearing investment products. According to Coin Bureau, the Monetary Authority of Singapore has proposed rules that would ban licensed stablecoin issuers from paying holders any yield at all, while tightening reserve, custody and disclosure requirements across the board.
What the Proposal Actually Requires
Under the draft amendments to Singapore's Payment Services Act, issuers would need to maintain reserve assets equal to at least 100% of tokens in circulation at all times, held in accounts fully segregated from the issuer's own funds and custodied exclusively with licensed financial institutions. On top of reserve requirements, issuers would face mandatory stress testing and would be required to maintain wind-down plans capable of returning holder funds even if the issuer fails. Only licensed issuers meeting these standards would be permitted to market their tokens using stablecoin-related terminology, closing a loophole that has let less-regulated projects trade on the credibility of the label.
Why Ban Yield Specifically
The yield ban is the proposal's most consequential piece for the broader market. MAS's reasoning is that stablecoins should function purely as payment instruments, not as a substitute for savings or investment products — paying interest on holdings, the regulator argues, blurs that line and risks pulling stablecoins into securities-like territory that demands a different regulatory regime entirely. That puts Singapore's approach in direct tension with a segment of the stablecoin market, particularly in decentralized finance, that has built entire yield-generating products around holding stablecoins.
Related: SEC Proposes First Transfer Agent Overhaul Since the 1970s for Tokenized Securities
Part of a Global Convergence
Singapore's approach is not an outlier. It closely tracks the reserve and disclosure requirements already written into the United States' GENIUS Act and the European Union's MiCA framework, both of which similarly push stablecoins toward a narrowly defined payments role rather than a yield-bearing one. For global issuers operating across multiple jurisdictions, the convergence simplifies compliance in one sense — the rules increasingly rhyme — but also forecloses jurisdiction-shopping for regimes that still permit yield-bearing stablecoin products.
What Comes Next
MAS's public consultation on the proposal runs through October 16, 2026, giving issuers, exchanges and industry groups roughly six weeks to formally object or request changes before the regulator moves toward a final rule. Issuers currently offering any form of yield to Singapore-based holders will need to watch this window closely, since a final rule modeled on the current draft would force a structural change to their product rather than a minor compliance tweak.
FAQ
What is MAS proposing for stablecoins?
A ban on paying yield to holders, a requirement for 100% reserve backing at all times, segregated custody, stress testing and mandatory wind-down plans.
Why does MAS want to ban stablecoin yield?
It argues stablecoins should function strictly as payment instruments, not as investment or savings products that pay a return simply for holding them.
When does the consultation close?
October 16, 2026.
How does this compare to US and EU rules?
It closely mirrors the reserve and disclosure standards in the US GENIUS Act and the EU's MiCA framework, both of which similarly limit stablecoins to a payments-focused role.
