MAS proposes stablecoin rules under the Payment Services Act; comments due 16 October

Implications

Facts

On 1 September 2026 MAS published the consultation paper 'Proposed Amendments to the Payment Services Act 2019 for Stablecoins Regulation' (sources: MAS consultation paper; Baker McKenzie briefing). The comment period ends on 16 October 2026. The proposal creates three categories: (i) 'MAS-regulated stablecoins' issued by domestic or foreign issuers under MAS supervision; (ii) 'designated systemic stablecoins' that MAS designates as systemically important; and (iii) 'MAS-recognised stablecoins' issued overseas and recognised by MAS subject to conditions. Coins that fall into none of these continue to be treated as digital payment tokens under the PSA (source: Baker McKenzie, September 2026). Requirements cited include value stability, capital requirements, redemption at par, enhanced disclosure, safeguarding of customer funds before issuance, a ban on paying interest on MAS-regulated stablecoins, stress testing, and recovery and orderly exit plans (source: FinTech Global, 1 September 2026). The amount of capital required and the redemption deadline will determine the cost of issuing under the regime.

Analysis

Over time, MAS published a stablecoin framework as policy in August 2023; this step moves it into statute under the PSA. Creating a category to recognise foreign-issued coins signals a design premised on cross-border circulation rather than domestic issuance alone. The interest ban appears aimed at preventing stablecoins from gathering funds as a deposit substitute. For consumer finance, the direct effect is therefore not on credit funding but on additional payment and remittance channels.

Counterpoints and uncertainties

This is a consultation, and categories and requirements may change in the final rules. Specific values such as capital amounts and redemption deadlines will determine which issuers find the regime viable.