MAS Proposes Stablecoin Regulation, Tokenization Standards

The Monetary Authority of Singapore (MAS) has unveiled plans for comprehensive stablecoin regulation. In a speech at the Singapore Fintech Festival, MD Chia Der Jiun warned that unregulated stablecoins often lose their peg, posing risks to financial stability. The proposed rules will require issuers to hold high-quality reserves and guarantee reliable redemption rights. MAS drew parallels to the 2008 money-market crisis and the UST/LUNA collapse that wiped out $55 billion, as well as Three Arrows Capital’s 2022 failure. As regulated stablecoins gain systemic importance, MAS will strengthen rules, boost cross-border cooperation and consider central bank facility access. This phased approach to stablecoin regulation aims to shield the market from depegging shocks and support institutional adoption. Separately, MAS is testing a wholesale CBDC and tokenized assets under Project BLOOM. It also backs tokenized assets through Project Guardian trials with banks such as Citi and BNY Mellon. MAS urged the industry to adopt open standards and interoperability to avoid fragmented networks.