Singapore is moving its stablecoin rulebook from guidance to statute. On 1 September the Monetary Authority of Singapore (MAS) published a consultation on amendments to the Payment Services Act 2019 that would turn its 2023 stablecoin framework into law: licensing, capital, redemption at par, and a flat ban on paying interest.
The detail most readers will skim past matters most to anyone holding stablecoins in a self-custody wallet. Issuers would need the technical ability to trace, freeze and burn tokens linked to illicit activity. A regulated stablecoin in your wallet is still, by design, a token its issuer can switch off.
Key facts
- On 1 September 2026, MAS published a consultation on amending the Payment Services Act 2019 to put its 2023 stablecoin framework into law.
- The licensing regime covers Singapore-incorporated issuers of single-currency stablecoins pegged to the Singapore dollar or any G10 currency; foreign issuers under adequate home regulation could apply for MAS recognition.
- Proposed safeguards include redemption at par, capital and disclosure rules, a ban on paying interest, mandatory stress testing, recovery and wind-down plans, and safeguarding customer funds before issuance.
- MAS-regulated stablecoin issuers would need capabilities to trace, freeze and burn tokens linked to illicit activity, according to Lowenstein Sandler’s summary of the proposals.
- Only licensed issuers could use the “MAS-regulated stablecoin” label; all other stablecoins would be treated as digital payment tokens.
- Feedback on the MAS stablecoin consultation is due by 16 October 2026.
What did MAS propose on September 1, 2026?
MAS proposed amending the Payment Services Act 2019 so that its 2023 stablecoin framework becomes binding law. Singapore-incorporated issuers of single-currency stablecoins pegged to the Singapore dollar or a G10 currency would be licensed, held to value-stability, capital, par-redemption and disclosure standards, and barred from paying interest to holders.
The consultation, as FinTech Global reported, layers extra safeguards on top of the 2023 core: mandatory stress testing, recovery and orderly wind-down plans, and a requirement to safeguard customer funds before tokens are even issued. MAS would also get powers to designate stablecoins as systemic, bringing tighter oversight for the largest issuers.
Foreign issuers aren’t locked out. A stablecoin issued abroad by an issuer under adequate home regulation could be recognised by MAS, and cross-jurisdiction structures — a Singapore entity working with an overseas issuer — are allowed if the risks are controlled. As Baker McKenzie puts it, the point is to let consumers and businesses tell apart stablecoins whose issuers MAS regulates for value stability from those it doesn’t.
MAS Deputy Managing Director Ho Hern Shin framed the amendments as a way to promote responsible innovation while holding issuers to high governance standards.
The label is the line
Only licensed issuers could call their token a “MAS-regulated stablecoin”. Everything else would be treated as a digital payment token under the existing regime. That’s a labelling boundary, not a ban — but it shows exactly where Singapore draws the line of trust.
No yield, by law
The interest ban is deliberate. A stablecoin that pays yield starts to look like a deposit or an investment product, and MAS wants these tokens to stay a payment instrument: fully backed, redeemable at par, and boring.
Why would a regulated stablecoin need freeze and burn powers?
Because regulators want issuers to be able to act on illicit flows after tokens have left the issuer’s platform. According to Lowenstein Sandler, the proposals include a mandate for technical capabilities to trace, freeze and burn stablecoins linked to illicit activity — so the issuer can block or destroy tokens sitting at any address.
In practice this isn’t new. Most large stablecoins already run on smart contracts with admin controls, and issuers have used them. What Singapore’s draft does is turn that capability into a licensing expectation rather than an issuer’s policy choice. For compliance teams it’s a feature. For self-custody users it’s a fact worth being clear about.
Holding the keys is not the same as controlling the asset.
Your seed phrase controls the address. The issuer’s contract controls the token. If a regulated issuer freezes an address, your keys still work — they just unlock a balance that can’t move. Picking one of the best self-custody wallets removes exchange risk. It doesn’t remove issuer risk.
G20 and the market backdrop
The same day, G20 finance ministers closed their meeting in Asheville, North Carolina (31 August–1 September) with a statement released by US Treasury Secretary Scott Bessent. It promised “clear pathways” for digital-asset innovation, asked the Financial Stability Board to report on cross-border stablecoin risks, and left the detailed rules to national regulators — which is precisely what Singapore is now doing.
Markets were quieter than the policy news. Bitcoin opened 1 September at $78,559 and traded around $77,946 at 8:19 a.m. ET, according to Yahoo Finance, after August closed as BTC’s best month since November 2024 with a gain of roughly 25%. That’s context, not a forecast or financial advice.
What does the MAS stablecoin law mean for swap users and merchants?
It means treating stablecoins as issuer-controlled instruments, even when they sit in a hardware wallet. Regulated stablecoins get stronger reserves and par redemption, but also formal freeze and burn tooling. Use them for payments and short-term parking, and size long-term holdings with issuer risk in mind.
- Know your network. The same USDT or USDC lives on several chains with different fees and confirmation times; our USDT TRC20 vs ERC20 vs Solana guide covers the trade-offs.
- Diversify out of issuer risk deliberately. Bearer assets without an issuer, such as BTC or XMR, carry volatility risk but not freeze risk.
- Move between them without custody. On SwapZilla you can swap USDT or USDC across networks, or into BTC or XMR, comparing quotes from several providers with no account. Coins go straight to the address you set.
Merchants using SwapZilla Pay can settle in stablecoins, which is the sensible choice for price stability. The trade-off: settled balances sit under an issuer’s freeze controls. Sweep regularly and decide on purpose how much stays in stablecoins.
Final thoughts
Singapore’s consultation is good news for anyone who wants stablecoins with enforceable reserves, par redemption and no yield games. It is also an unusually clear statement of how regulated stablecoins work: the issuer keeps a hand on the switch.
A regulated stablecoin is a better IOU. It is still an IOU.
Use stablecoins for what they’re good at — pricing, payments, settlement — and keep that trade-off in view when you decide what stays in your wallet for years.