Singapore Sounds The Alarm: Are Stablecoins The Next Financial Threat?
Singapore’s high monetary regulator has signaled a tougher stance on stablecoins, saying solely totally supervised tokens ought to be handled as dependable cash for giant transactions.
Regulators are shifting to separate settlement-grade devices from the remainder of the market. The message was blunt and aimed squarely at issuers that function with out strict oversight.
Regulators Draw A Clear Line
According to Monetary Authority of Singapore Managing Director Chia Der Jiun, some unregulated stablecoins have a “patchy report of holding their peg.”
He warned that sudden losses of confidence in these tokens can resemble money-market fund runs from 2008. Chia added that such cash are “not appropriate as secure settlement property for giant wholesale transactions.”
His remarks got here in a keynote on the Singapore FinTech Festival and clarify that the city-state intends to favor well-capitalized, intently supervised issuers for settlement makes use of.
Rules Focus On Reserves And Redemption
Based on stories, MAS is getting ready laws that builds on a regulatory framework launched on Aug. 15. The framework units reserve backing and redemption reliability as the principle checks for eligibility. In quick: issuers should present credible backing and sensible methods for customers to redeem tokens.
Over time, Chia mentioned, if sure stablecoins develop large enough to have an effect on the broader system, guidelines will want tightening and cross-border cooperation can be required. Access to central financial institution amenities was talked about as a attainable future step for actually systemic tokens.
Numbers Point To Bigger Stakes
According to a Binance Research report, the global stablecoin market handed $300 billion in whole capitalization in October 2025. Daily common transaction volumes reached $3.1 trillion.
Monthly stablecoin funds have topped $10 billion as of August 2025, with 63% of that quantity tied to B2B exercise. These numbers present why regulators are paying consideration.
They additionally assist clarify why USDT and USDC stay dominant gamers as use strikes past buying and selling into funds and enterprise flows. Bitcoin’s rise above $120,000 has additionally been cited as one issue growing total market exercise.
CBDCs And Tokenized Bank Money On The Table
Chia additionally outlined MAS’s broader view of settlement property, mentioning wholesale central financial institution digital foreign money and tokenized financial institution liabilities.
The regulator’s BLOOM initiative — Borderless, Liquid, Open, Online, Multicurrency — is testing how these devices would possibly work collectively inside a tokenized finance system.
Financial corporations and clearing networks had been urged to run trials below the initiative so sensible points will be noticed early.
Featured picture from Unsplash, chart from TradingView
