Singapore is drawing a clear line between a stablecoin and a savings product.
The Monetary Authority of Singapore opened consultation on a dedicated stablecoin framework that would require issuers to maintain reserve assets covering at least 100% of tokens in circulation, segregate those reserves from company assets and use licensed custodians.
The proposal would also prohibit issuers from paying interest or other benefits linked directly to stablecoin balances.
Why the yield ban matters
MAS wants regulated stablecoins to function primarily as payment and settlement assets, not deposit-like investment products.
That creates a structural distinction:
stablecoin = digital cash
while
yield product = separate financial product.
Why 100% reserves matter
Full reserve backing and asset segregation are designed to protect redemption.
Foreign stablecoins may gain a pathway
MAS is also considering limited recognition for foreign stablecoins regulated under comparable regimes.
Risks
Strict reserve and custody requirements raise issuer costs. A yield ban could also make regulated stablecoins less attractive than tokenized money-market funds or DeFi products.
What to watch next
Watch the final licensing regime, foreign-stablecoin recognition, reserve-asset rules, redemption deadlines and systemic-stablecoin provisions.
FAQ
What reserve level is proposed? At least 100%. Can issuers pay interest? Not under the proposal. Are the rules final? No. Could foreign stablecoins be recognized? MAS is considering a limited pathway.