MAS stablecoin framework and regulatory requirements in Singapore

The Monetary Authority of Singapore (MAS) proposed amendments to the Payment Services Act to create a new category for MAS-regulated stablecoins that must follow strict rules regarding reserve composition, capital levels, and consumer protection. These amendments create a specific category for "MAS-regulated stablecoins" to help users identify tokens that meet strict value stability standards. Any stablecoin failing these requirements falls into the Digital Payment Token (DPT) category. I find the proposed distinction between regulated issuers and DPTs messy for retail users. Regulated issuers must maintain a separate pool of reserve assets equal to the par value of all outstanding tokens in circulation. These issuers must also provide redemption at par within five business days. The framework requires issuers to hold a minimum of $1 million SGD or 50% of their annual operating expenses in capital. The MAS also considers whether to prohibit issuers from paying any interest that is directly attributable to the holding of a regulated stablecoin. The authority also explores multi-jurisdictional issuance and the recognition of foreign-issued stablecoins governed by comparable overseas regimes. The authority holds statutory power to designate any stablecoin as a "designated systemic stablecoin" to prevent systemic risk. Licensed DPT service providers must provide clear risk warnings to retail customers stating that non-regulated tokens may not maintain their promised value.

Comparing the numbers

Tether reported $1.04 billion in net income for the first quarter of 2026. While its net income grew, its outstanding liabilities decreased by 1.6% from $186.5 billion to $183.5 billion during that same period. Shareholder equity reached $8.2 billion, representing a nearly 30% increase from the $6.3 billion reported in the previous quarter. Tether’s cash and cash equivalents dropped 4% to $141.2 billion. Tether’s other investments surged 75% to $4.8 billion, and its public equity holdings reached $3.4 billion. Tether also entered a formal engagement with a Big Four accounting firm to complete its first full independent financial statement audit. I see these massive numbers and wonder if any regulator can truly oversee such vast liquidity.

Regulatory standards differ globally. The US GENIUS Act of 2025 allows for state-certified issuers if their circulation stays below $10 billion. In the European Union, the MiCA framework requires E-Money Tokens to be issued by credit institutions or electronic money institutions. Hong Kong also requires issuers to maintain reserve assets at market value. You should know that these divergent rules increase the compliance burden for any firm wanting to scale across borders.

The reality of failure

Crypto.com received a Major Payment Institution (MPI) license for digital payment token services on June 1, 2026. This license follows an in-principle approval from the previous year. The MAS remains aggressive in its stance against bad behavior in the digital asset sector. I recall the industry’s shock when the FTX collapse revealed an $8 billion hole in accounts in November 2022. The collapse caused $6 billion in customer withdrawals and wiped out major executive net worths. Alameda Research, a trading firm affiliated with FTX, held significant amounts of the FTT token. Some $473 million in funds were removed from FTX through unauthorized transactions. The stolen funds consisted mostly of stablecoins like Tether, which were quickly exchanged for Ether.

The new MAS framework requires issuers to implement liquidity risk management to address extreme stress scenarios. They must also perform stress testing at least quarterly and share those results with the regulator. The framework also requires annual recovery and orderly wind-down plans. These plans demand independently verified financial resources. Will the mandatory quarterly stress tests prevent another liquidity crisis from paralyzing the market?