The prohibition sits in the same consultation that would let a handful of foreign-issued tokens carry Singapore's regulatory label. Comments close on 16 October.
The Monetary Authority of Singapore has proposed banning interest payments on every stablecoin it regulates. The measure appeared on 1 September in a consultation on amendments to the Payment Services Act 2019, the statute that will carry Singapore's stablecoin regime out of policy paper and into law. Comments close on 16 October, and the central bank has not named an implementation date.
The prohibition is short in wording and long in consequence. An issuer licensed under Singapore's Single-Currency Stablecoin framework would not be permitted to pay holders anything for holding its tokens, which settles a question regulators in several jurisdictions have spent two years circling: whether a fully reserved payment token is allowed to behave like a deposit. Singapore's answer is no. MAS frames its regulated stablecoins as settlement instruments, and a settlement instrument does not pay a coupon.
That is a decision about revenue as much as product design. A single-currency stablecoin issuer holds cash and short-dated government paper against the tokens in circulation and keeps whatever those reserves earn; the float is the business. Barring payments to holders leaves that income with the issuer and removes the one mechanism by which a stablecoin could compete with a bank deposit for retail balances. Banks have been asking for precisely this outcome. Their trade bodies spent the summer arguing for their own tokenised settlement rails while pressing for tighter rules on everyone else's, and the yield question has been the sharpest edge of that campaign.
Singapore is not the first to land here. The American fight over whether issuers or their distribution partners may pass reserve income to holders ran through the CLARITY Act's drafting and has still not fully closed. What distinguishes the MAS proposal is that it attaches to a designation rather than to an asset class. Tokens outside the framework stay classified as digital payment tokens under Singapore's existing consumer protection rules. They simply cannot call themselves MAS-regulated.
That designation is the real subject of the consultation. Only issuers licensed under the Single-Currency Stablecoin framework could describe themselves as MAS-regulated stablecoin issuers, and the framework Singapore adopted in 2023 restricted the label to tokens issued domestically and pegged to the Singapore dollar or a Group of 10 currency: the US dollar, euro, yen, sterling, Swiss franc, Canadian dollar, Australian dollar, New Zealand dollar, Norwegian krone and Swedish krona. A label that narrow is close to useless for cross-border settlement, which is where the tokenisation business actually is.
So MAS is proposing two openings. Stablecoins issued jointly by Singaporean and foreign entities could qualify where their risks are sufficiently mitigated, and a limited number of foreign-issued stablecoins supervised under frameworks Singapore judges comparable could be recognised outright. Recognition would be selective rather than automatic. Nothing in the consultation suggests every token regulated by an overseas authority gets in, and MAS has not published the comparability test it intends to apply. Hong Kong, whose own licensed issuers opened to institutions through HashKey this year, is the obvious first candidate for a comparability finding.
The rest of the package reads like bank supervision. Issuers would face stress testing, recovery planning and orderly wind-down arrangements, and would have to safeguard customer monies received before the corresponding stablecoins have been issued — the window in which a buyer has handed over cash and holds nothing in return. MAS is also consulting on capital, value stability, redemption at par and disclosure requirements. Those are the provisions that decide whether the designation means anything when an issuer fails, and they are the ones most likely to be argued over before October.
"MAS' proposed legislative amendments will give effect to a stablecoin framework that promotes responsible financial innovation," said Ho Hern Shin, the central bank's deputy managing director for financial supervision, adding that trusted and well-regulated stablecoins "can serve as a credible settlement asset in tokenised financial markets, while mitigating risks to users and the broader financial system."
Europe got there first. MiCA already bars issuers of e-money tokens and asset-referenced tokens from granting interest to holders, which is why euro stablecoins launched under that regime pay nothing, and the regime has begun producing enforcement of its own since Austria fined Bitpanda 70,000 euros in August. Singapore is now importing the same rule into a framework it built separately. The convergence is not coincidental. Regulators writing stablecoin law in 2026 have almost without exception decided that a payment token which pays a return is a bank deposit wearing a different name, and they have decided it in the face of sustained industry argument to the contrary.
The consultation runs to 16 October. The framework it would implement was finalised in 2023; three years on, the licence that confers the name still does not exist in Singapore statute.
