Banks Face New Rules for Stablecoin Issuance and Distribution
Singapore’s proposed stablecoin framework has significant implications for the banking sector. Under the draft amendments, banks may only issue a MAS-regulated stablecoin through a separate non-bank entity. This separation requirement prevents banks from commingling stablecoin issuance activities with their core banking operations, reducing risk contagion between traditional finance and digital assets.
For banks distributing stablecoins to retail customers, the framework introduces enhanced disclosure requirements, risk warnings, and marketing limits for non-MAS-regulated stablecoins. These measures ensure that banks play a responsible role in the distribution of stablecoin products, particularly when offering tokens that fall outside the MAS-SCS framework.
Singapore Gulf Bank: A Case Study in Regulated Stablecoin Integration
Singapore Gulf Bank (SGB) has emerged as a pioneering example of how traditional banking can integrate with stablecoin infrastructure under a clear regulatory framework. In February 2026, SGB announced the launch of the first regulated platform combining fiat currencies and stablecoins into a single banking network.
The bank’s SGB Net clearing system now supports stablecoin settlement capabilities, allowing institutional clients to trade across fiat and digital assets within a single regulated infrastructure. Access to the platform opened in Q1 2026. SGB subsequently introduced a stablecoin mint and redeem service for institutional clients, enabling direct conversion between bank deposits and stablecoins.
This model demonstrates how MAS’s regulatory clarity enables banks to offer stablecoin services without compromising compliance or risk management standards.
Impact on Digital Payment Token Service Providers
The proposed framework also affects DPT service providers — the exchanges and payment firms that hold or distribute stablecoins to Singapore customers. Under the draft amendments, stablecoins that are not MAS-regulated will continue to be treated as digital payment tokens under the PS Act, subject to existing consumer protection safeguards.
However, DPT service providers offering non-MAS-regulated stablecoins to retail customers may face additional requirements, including enhanced reserve disclosure and marketing restrictions. These provisions create a two-tier market: MAS-regulated stablecoins with the highest level of consumer protection, and other digital payment tokens with more limited safeguards.
Institutional Adoption: Ripple, Trade Finance, and Tokenised Assets
Singapore’s stablecoin framework is not developing in isolation. The MAS Project Guardian initiative has already attracted major institutional players. Ripple’s RLUSD stablecoin pilot in the MAS BLOOM sandbox, announced in March 2026, focuses on cross-border trade finance — a use case that directly addresses the inefficiencies of traditional correspondent banking.
The pilot leverages Ripple’s existing Major Payment Institution licence in Singapore, demonstrating how stablecoin innovation can build on existing regulatory approvals. For institutional investors and corporates, these developments signal that Singapore is building the infrastructure necessary for stablecoins to serve as a credible medium of exchange in wholesale transactions.
The Road Ahead: Implementation Timeline and Industry Preparation
The consultation on the proposed amendments closes on 16 October 2026. Following the consultation period, MAS will review feedback and finalise the legislative amendments, with subsidiary legislation on reserve composition and audit requirements to follow separately.
For banks, DPT service providers, and stablecoin issuers, the coming months will require careful assessment of their product offerings against the proposed framework. Institutions that hold or distribute stablecoins to Singapore customers should review their product terms against the proposed reserve and disclosure requirements. Those intending to issue MAS-regulated stablecoins must prepare for the licensing application process, including the capital and prudential requirements that accompany the new stablecoin issuance licence.
The full consultation paper is available on the MAS website, and industry stakeholders are encouraged to submit feedback before the October deadline.
