Key Takeaways
- MAS warns unregulated stablecoin are too risky for large-scale settlement.
- New rules focus on reserves and redemption reliability.
- Global stablecoin market hits $300B, driving regulatory urgency.
- Singapore’s BLOOM initiative explores CBDCs and tokenized bank money.
Singapore Sounds The Alarm: Are Stablecoins The Next Financial Threat?
As global stablecoin usage accelerates, Singapore’s top financial regulator is signaling a major shift. The Monetary Authority of Singapore (MAS) has warned that only tightly supervised stablecoins should be trusted as reliable money—especially for large-scale settlement. The message comes as the sector’s size and influence reach record highs, forcing regulators to draw hard lines around what qualifies as “safe” digital cash.
MAS Draws A Firm Boundary
Speaking at the Singapore FinTech Festival, MAS Managing Director Chia Der Jiun cautioned that many unregulated stablecoins have a “patchy record of keeping their peg.” He compared sudden confidence shocks in such tokens to the 2008 money-market fund runs—highlighting the risk of fast, systemic-like disruptions.
Also Read: Why FDIC’s New Stablecoin Framework Could Unlock Billions
Chia’s stance was direct: these unstable tokens are not suitable for wholesale payments. Singapore intends to prioritize well-capitalized, fully supervised stablecoin issuers that can guarantee stability, redemption, and transparency.
Reserve Rules And Redemption Are Front And Center
MAS is preparing new legislation that expands on its Aug. 15 stablecoin regulatory framework. The two most important criteria:
- Credible reserve backing that can withstand market stress
- Reliable, practical redemption mechanisms for users
If the market grows further—or if certain tokens become systemically important—MAS says rules will tighten again. Future steps could include access to central bank facilities, but only for the most trustworthy issuers.
Surging Market Data Raises The Stakes
The timing of these warnings is no coincidence. The global stablecoin market surpassed $300 billion in total capitalization in October 2025, while daily transaction volumes hit $3.1 trillion, according to Binance Research. Monthly stablecoin payments now exceed $10 billion, with B2B transactions making up 63% of that volume.
With USDT and USDC dominating payments and Bitcoin trading above $120,000, the speed and scale of digital asset flows are amplifying regulatory urgency.
Also Read: Borderless Pay? Visa Tests USDC Stablecoins for Global Payouts
CBDCs, Tokenized Money, And Singapore’s BLOOM Vision
Chia also highlighted MAS’s broader roadmap, pointing to wholesale CBDCs and tokenized bank liabilities as future settlement tools. These are being tested under Singapore’s BLOOM initiative—a push to build a borderless, liquid, multicloud, and multicurrency tokenized financial system.
MAS is urging banks, clearing networks, and fintech firms to join trials now, ensuring risks are addressed before these systems reach mainstream scale.
Conclusion
Singapore’s alarm on unregulated stablecoins marks a turning point. As the market swells, regulators are racing to ensure that only the most stable, well-supervised tokens become part of critical financial infrastructure. For businesses and investors, the takeaway is clear: credible, regulated stablecoins will shape the future of digital settlement—and those who adapt early will benefit most.
