Monetary Authority of Singapore’s Firm Stance on Stablecoin Regulation
The Monetary Authority of Singapore (MAS) has announced a rigorous approach to the regulation of stablecoins, emphasizing that only thoroughly supervised tokens should be recognized as dependable means for significant transactions. This strategic move aims to differentiate settlement-grade instruments from other market entities, sending a clear message to issuers operating without stringent oversight.
Establishing Clear Regulatory Boundaries
In a recent address at the Singapore FinTech Festival, MAS Managing Director Chia Der Jiun highlighted the inconsistency of some unregulated stablecoins in maintaining their value peg. He warned of the potential for sudden confidence losses in these tokens, drawing parallels to money-market fund runs witnessed during the 2008 financial crisis. Chia stressed that such coins are unsuitable as secure settlement assets for substantial wholesale transactions.
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Focusing on Reserves and Redemption Standards
MAS is in the process of drafting legislation to enhance a regulatory framework initially released on August 15. This framework emphasizes the importance of reserve backing and redemption reliability as criteria for stablecoin eligibility. Issuers must demonstrate credible backing and offer practical redemption options to users. Chia indicated that as certain stablecoins grow in market influence, regulatory tightening and international cooperation may become necessary, potentially providing access to central bank facilities for systemic tokens.
Implications of Market Growth
Data from Binance Research reveals that the global stablecoin market surpassed $300 billion in total capitalization as of October 2025, with daily transaction volumes averaging $3.1 trillion. By August 2025, monthly stablecoin payments exceeded $10 billion, with 63% of the volume stemming from B2B activities. These statistics underscore the importance of regulatory scrutiny.
Dominant players like USDT and USDC continue to lead as stablecoins extend their use beyond trading into payments and business transactions. The surge in Bitcoin’s value, surpassing $120,000, is also noted as a contributing factor to the heightened market activity.
Exploring CBDCs and Tokenized Banking Solutions
Chia discussed MAS’s broader perspective on settlement assets, including wholesale central bank digital currencies (CBDCs) and tokenized bank liabilities. The BLOOM initiative (Borderless, Liquid, Open, Online, Multicurrency) is being tested to assess how these instruments might function within a tokenized financial system. Financial institutions and clearing networks are encouraged to conduct trials under this initiative to identify practical challenges early on.
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