Stablecoin (Singapore): How MAS-Regulated Digital Money Actually Works
A stablecoin is a digital token pegged to a fiat currency such as the Singapore Dollar or US Dollar, designed to hold a stable value rather than float freely like Bitcoin. Under MAS’s 2023 framework, an issuer must back every coin with reserve assets equal to at least 100% of coins in circulation and honour redemption at face value within five business days.
Not financial advice. All figures for educational reference only. Data as at August 2026. Last updated: August 2026.
Key Takeaways
- MAS’s stablecoin framework applies only to single-currency stablecoins (SCS) pegged to the Singapore Dollar or a G10 currency and issued in Singapore.
- A “MAS-regulated stablecoin” must hold reserve assets equal to at least 100% of coins in circulation, checked monthly by an independent party and audited annually.
- Non-bank issuers need a Major Payment Institution licence once issuance passes S$5 million; bank issuers are exempt from that licensing step but must still follow MAS’s reserve and redemption rules.
- Redemption at par value must happen within five business days of a holder’s request, giving buyers a legal claim on the underlying reserve assets, not just a promise.
- Not every stablecoin traded on a Singapore-accessible exchange carries the MAS-regulated label — unregulated stablecoins can still circulate, just without the same reserve and redemption guarantees.
Table of Contents
What Is a Stablecoin?
How Does It Work in Singapore?
Example
Advantages
Risks and Limitations
Stablecoin vs CBDC vs Cryptocurrency Singapore
The Bottom Line
Frequently Asked Questions
What Is a Stablecoin?
A stablecoin is a type of cryptocurrency built to solve the volatility problem that makes Bitcoin or Ether impractical for everyday payments. Instead of floating on open-market demand, a stablecoin is pegged 1:1 to a reference asset — almost always a fiat currency like the US Dollar or Singapore Dollar — so that one token is designed to always be redeemable for one unit of that currency.
Singapore has taken one of the more structured regulatory approaches to this asset class globally. The Monetary Authority of Singapore (MAS) first brought stablecoin issuance under the Payment Services Act as a form of digital payment token service, then went further in August 2023 by finalising a dedicated Stablecoin Regulatory Framework specifically for single-currency stablecoins (SCS) pegged to the Singapore Dollar or any G10 currency and issued here. That framework is being phased in with issuers expected to fully comply by mid-2026.
The key idea behind the framework is that a token calling itself a “stablecoin” should actually behave like one. Before MAS stepped in, any digital token claiming a 1:1 peg could call itself “stable” with no independent verification of what, if anything, backed it. MAS’s answer was to create a specific, higher label — the “MAS-regulated stablecoin” — that only issuers meeting strict reserve, custody, audit and redemption standards can use in their marketing.
How Does a Stablecoin Work in Singapore?
To issue a MAS-regulated stablecoin in Singapore, an entity must meet several conditions. First, reserve assets must equal at least 100% of the value of stablecoins in circulation at all times, held in low-risk, highly liquid assets such as cash, cash equivalents, or short-dated Singapore Government Securities. Second, those reserves must be held separately from the issuer’s own funds with an MAS-approved custodian, so a stablecoin holder’s claim doesn’t get mixed up with the issuer’s corporate assets if the business runs into trouble.
Third, reserves undergo monthly independent attestations and a full annual audit, both of which the issuer must disclose publicly. Fourth, and arguably most important for everyday users, redemption at face value must be honoured within five business days of a request — so a holder can always convert their tokens back to SGD (or the pegged currency) at par, not at whatever price a secondary market happens to offer that day.
Licensing differs by issuer type. A non-bank issuer only falls under the full SCS framework once its total stablecoin issuance exceeds S$5 million — below that, it’s treated as a smaller digital payment token service. Once over that threshold, it needs a Major Payment Institution (MPI) licence under the Payment Services Act. A bank issuer is exempt from needing a separate MPI licence for stablecoin issuance since it’s already licensed and supervised by MAS, but it must still meet the same reserve, custody and redemption standards for its stablecoin to use the MAS-regulated label. All issuers, bank or not, must also comply with anti-money laundering and countering-the-financing-of-terrorism (AML/CFT) obligations.
a Stablecoin Example
Suppose a Singapore-licensed payment institution issues an SGD-pegged stablecoin used to settle trades on a Project Guardian tokenised bond pilot. An institutional investor buys 10,000 tokens for S$10,000, and the issuer places S$10,000 worth of cash and short-dated Singapore T-bills with an MAS-approved custodian as backing.
Six months later, the investor wants to cash out and requests redemption of all 10,000 tokens. Under the MAS framework, the issuer must return S$10,000 in fiat currency within five business days — not a discounted amount, and not subject to how the token happens to be trading on a secondary exchange that week. If the issuer instead held only S$8,000 of real reserves against those 10,000 tokens (an under-collateralised position), it would already be in breach of the framework well before any redemption request, since the 100% backing rule applies continuously, not just at redemption time.
Advantages of a Stablecoin
- Price stability for everyday and institutional use. Unlike Bitcoin or Ether, a well-run stablecoin doesn’t swing 5–10% in a day, making it usable for payments, remittances and settling trades without price risk between agreeing a price and settling it.
- Faster, cheaper cross-border settlement. A stablecoin can move value across borders in minutes on a blockchain rail, compared to one to three business days and higher fees through traditional correspondent banking.
- Regulatory clarity investors can actually check. The MAS-regulated label lets a Singapore-based investor verify reserve backing and redemption rights before trusting a token, instead of taking an issuer’s marketing at face value.
- A settlement layer for tokenised finance. Regulated stablecoins are increasingly used to settle trades in MAS-backed pilots like Project Guardian, letting a tokenised bond or fund purchase settle almost instantly instead of over T+2.
Risks and Limitations
- Reserves can still be mismanaged. The 100% backing rule is a regulatory requirement, not a physical guarantee — poor custody arrangements, fraud, or a slow-moving audit cycle could let a shortfall go undetected for weeks.
- Stablecoins are not SDIC-insured. Unlike a bank savings account protected up to S$100,000 under the Singapore Deposit Insurance Corporation scheme, a stablecoin holder has no deposit insurance if the issuer fails.
- Many circulating stablecoins are not MAS-regulated. Popular global stablecoins traded on exchanges accessible from Singapore may not meet — or even attempt to meet — the local framework, so the protections described here don’t automatically apply to them.
- Pegs can still break under stress. Even well-collateralised stablecoins have de-pegged briefly during market panics when redemption requests spiked faster than an issuer could liquidate reserve assets.
Stablecoin vs CBDC vs Cryptocurrency Singapore
These three digital asset types are often confused because they all move on blockchain-style rails, but they have very different issuers, backing and risk profiles.
| Feature | Stablecoin (MAS-Regulated) | CBDC (Digital SGD) | Cryptocurrency (e.g. Bitcoin) |
|---|---|---|---|
| Issuer | Licensed private company or bank | MAS (the central bank itself) | No issuer — decentralised network |
| Backing | 100%+ reserve assets, audited | Central bank liability (like cash) | No backing — market-driven value |
| Price stability | Pegged to a fiat currency | Equal to fiat by definition | Highly volatile |
| Available to the public today | Yes, if MPI-licensed or bank-issued | Not yet for retail; wholesale pilots only | Yes, via exchanges |
| Deposit insurance | None (SDIC does not apply) | N/A — it is central bank money | None |
Source: MAS Stablecoin Regulatory Framework (2023); MAS Project Orchid publications.
The Bottom Line
For Singapore users, a stablecoin is only as safe as its issuer’s compliance with MAS’s reserve, custody and redemption rules — the “MAS-regulated stablecoin” label exists precisely so you don’t have to take that on faith. Before treating any stablecoin as a cash-equivalent, confirm it actually carries that regulatory status rather than assuming all tokens marketed as “stable” are equal.
Frequently Asked Questions
Is stablecoin legal to use in Singapore?
Yes. Using, holding or trading stablecoins is legal in Singapore. Issuing one and marketing it as “MAS-regulated” specifically requires meeting the Stablecoin Regulatory Framework’s reserve, custody, audit and redemption conditions.
Can I redeem a MAS-regulated stablecoin for cash at any time?
You can request redemption at any time, and the issuer must pay you the face value within five business days. This is a regulatory requirement, not a feature every issuer offers voluntarily.
Are all stablecoins on exchanges in Singapore MAS-regulated?
No. Many popular stablecoins traded globally, including on platforms accessible in Singapore, are not issued under MAS’s local framework and don’t carry the same reserve or redemption guarantees.
Is a stablecoin the same as a bank deposit?
No. A bank deposit is protected by SDIC insurance up to S$100,000 per depositor per bank. A stablecoin, even a MAS-regulated one, carries no deposit insurance — your protection comes from the reserve-backing rules instead.
What's the difference between a stablecoin and Singapore's digital dollar (CBDC)?
A stablecoin is issued by a private company or bank and backed by reserve assets it holds. A CBDC is issued directly by MAS as central bank money, carrying no reserve or credit risk at all. See our CBDC Singapore glossary entry for more.
Why did MAS create a separate stablecoin framework instead of just using crypto rules?
MAS wanted a higher, more specific bar for tokens explicitly marketed as “stable,” since consumers and businesses may treat them like cash equivalents. General digital payment token rules didn’t require reserve backing or guaranteed redemption at par.