Singapore proposes 100% reserves and a ban on yields for stablecoin issuers
Singapore's financial authorities have proposed new regulatory requirements that would mandate stablecoin issuers to maintain 100% reserves backing their digital assets, while also prohibiting them from offering yields or interest to holders. The proposals were outlined by the Monetary Authority of Singapore (MAS) as part of a broader effort to strengthen oversight of the country's growing stablecoin sector.
The move follows a global wave of stablecoin regulation that has accelerated since the collapse of TerraUSD in 2022, which wiped out tens of billions of dollars in market value and prompted regulators worldwide to scrutinize algorithmic and yield-bearing stablecoin models. Singapore has been positioning itself as a crypto-friendly hub while simultaneously tightening its regulatory framework to protect consumers and maintain financial stability.
The proposed rules carry significant implications for stablecoin issuers operating in or seeking access to Singapore's market. A strict 100% reserve requirement would limit the ability of issuers to generate revenue through traditional lending or investment of reserve assets, while the ban on yields would fundamentally alter the competitive dynamics for platforms that have used interest-bearing stablecoins as a key product differentiator.
Industry participants and stablecoin issuers are expected to submit feedback during a public consultation period before the rules are finalized. Market observers will be watching closely to see whether other major financial centers in Asia follow Singapore's approach as regional regulatory frameworks continue to take shape.
Source: CoinDesk
