Singapore proposes 100% reserves and a ban on yields for stablecoin issuers - Cryptonews.net

Singapore’s central bank, the Monetary Authority of Singapore (MAS), has issued a public consultation proposing that single-currency stablecoin issuers maintain a 100% reserve of underlying assets and be barred from offering yields to holders. The proposal aims to strengthen the regulatory framework for digital payment tokens that are pegged to the Singapore dollar or other fiat currencies.

The move reflects a broader push to distinguish well-backed, regulated stablecoins from algorithmic or unbacked counterparts that have eroded investor confidence. By mandating full reserves and prohibiting interest payments, MAS seeks to ensure that stablecoins function strictly as a medium of exchange rather than as investment vehicles, reducing the risk of bank-run-style redemption pressures and potential financial instability.

Market participants will be watching the finalised rules, particularly how existing issuers adjust their business models and whether other jurisdictions adopt similar safeguards. The outcome could influence global standards for stablecoin regulation, shaping how digital assets integrate with traditional financial systems. For now, the consultation signals that regulatory expectations are hardening, with a clear emphasis on transparency, liquidity, and consumer protection.