MAS to issue tokenised bills and draft stablecoin law

The Monetary Authority of Singapore (MAS) has said it will issue tokenised bills that will be settled in central bank digital currency sometime in 2026, and that it is ready to begin drafting stablecoin legislation.

The central bank’s managing director, Chia Der Jiun, said in a speech today (November 13) that the MAS planned to issue tokenised bills to primary dealers, and that these would be settled using the Singapore dollar-denominated wholesale CBDC. Chia said further details of these plans would be shared next year.

Chia also said that three Singaporean banks – DBS, OCBC, and UOB – had completed a live trial for the settlement of interbank overnight lending transactions using a Singapore dollar-denominated wholesale CBDC. In a separate release, the MAS said the settlement had been carried out via a “test network” the central bank had debuted this month. The network was one of several initiatives announced by the MAS to support the commercialisation of asset tokenisation.

The MAS said that settlements made in the wholesale CBDC had been recorded in the participating lenders’ official records and regulatory filings. The central bank described the network as a distributed ledger technology that enabled financial institutions to test the settlement of tokenised assets using the CBDC.

Chia said tokenised assets had established a presence in financial markets. “But have asset-backed tokens achieved escape velocity? Not yet,” he said. The managing director added that CBDCs, tokenised bank liabilities and regulated stablecoins could all potentially serve as safe and reliable settlement assets.

“Tokenised bank liabilities benefit from current central bank and regulatory arrangements that underpin value stability and the singleness of money,” Chia said. Banks had used tokenised liabilities internally with success, he added, and institutions would now have to demonstrate how they might be used across different lenders, networks and applications.

Chia said there had been “a lot of attention on stablecoins” and stressed that they would need to be properly regulated to achieve both flexibility of use and stability. “MAS recognises this, and has finalised the features of our stablecoin regulatory regime, and will be preparing draft legislation,” he said.

“Under our regime, we have given importance to sound reserve backing and redemption reliability,” he added.

Chia said that if stablecoins gained systemic importance, regulations would need to be strengthened and cross-border regulatory co-operation enhanced.

In August, the central bank said it planned a regulatory framework for stablecoins that would outline stability, capital, redemption and disclosure requirements. These would apply to stablecoins issued in Singapore and pegged to the domestic currency or to any currency from a G10 country. The MAS’s deputy managing director, Ho Hern Shin, said the framework aimed “to facilitate the use of stablecoins as a credible digital medium of exchange, and as a bridge between the fiat and digital asset ecosystems”.

The central bank established its first tokenised asset project in 2022 and has since experimented with instruments including tokenised funds, bonds and stablecoins. In May, it issued guidelines for Singapore-based entities engaged in providing digital assets or related services outside the country.