MAS Says Stablecoins May Not Suit Large Wholesale Settlement as It Tests Tokenised Bills

Singapore's central bank has drawn a firm line under one of the most contested questions in digital finance: whether privately issued stablecoins can be trusted to settle the largest transactions in the financial system. Chia Der Jiun, Managing Director of the Monetary Authority of Singapore (MAS), used a keynote address at the INSEAD Digital Finance and Agentic AI Summit on 9 October 2026 to argue that stablecoins cannot be assumed to hold their par value and may not be suitable for settling large wholesale transactions. His remarks landed a week before MAS closes a public consultation on stablecoin legislation, and as the regulator prepares to settle tokenised MAS Bills using a wholesale Singapore-dollar central bank digital currency (CBDC).

Chia framed the issue as a question of settlement hierarchy rather than a simple preference for public money. He contrasted commercial bank deposits, which hold value parity because they can be exchanged at par for central bank reserve money, with stablecoins, saying this is not a given for stablecoins. Confidence in holding par, he argued, must instead be achieved primarily through transparency and adequacy of reserve assets. He added that should some stablecoins become systemically important, the need to anchor their value stability increases, and he noted discussions and proposals for additional regulatory requirements and for giving such issuers access to central bank reserves. He did not say whether MAS supports reserve access.

The consultation closing on 16 October 2026 was launched on 1 September 2026 and proposes amendments to the Payment Services Act to implement a framework for single-currency stablecoins issued in Singapore and pegged to the Singapore dollar or a G10 currency. It covers reserve backing, capital requirements, redemption at par and disclosure, and would create a separate stablecoin-issuance licence. Licensed issuers would have to hold reserves at least equal to the par value of coins in circulation and redeem at par. The draft rules would also let MAS recognise a limited number of foreign stablecoins from equivalent regimes and exempt some multi-jurisdictional issuance arrangements from local incorporation and reserve requirements.

Alongside the stablecoin work, MAS is moving ahead with wholesale CBDC settlement. The regulator plans to use a wholesale Singapore-dollar CBDC to settle tokenised MAS Bills, a trial first announced last November. Wholesale SGD CBDC has been available through the SGD Testnet since 2025, when DBS, OCBC and UOB completed the first live trial settling overnight interbank loans.

Key Facts

Blockhead reported on October 12 that Chia placed stablecoins below deposit tokens and central bank money in MAS's settlement hierarchy. According to that account, deposit tokens are likely to find acceptance in banking use cases such as cash management, stablecoins may find wider adoption on crypto exchanges and in fintech payments, and CBDCs will ultimately be needed to anchor monetary stability. The report also noted that the stablecoin consultation closes a week after Chia's speech.

Fintech News Singapore reported on October 12 that MAS plans to use wholesale CBDC to settle tokenised MAS Bills, to bring tokenised assets and digital central bank money onto common infrastructure that supports settlement finality. The publication quoted Chia saying that as usage of private digital money scales, CBDCs will ultimately be needed to anchor monetary stability. It added that MAS is expanding commercial tokenisation through Project Guardian and developing interoperability standards via its Global Layer One initiative.

Dalimss News reported on October 12 that the bill-settlement work is the next step in bringing tokenised assets and central bank money onto common infrastructure, and that Chia did not announce a public launch date, a new retail coin or a public subscription window. Dalimss detailed the consultation's stress testing requirement: tests at least quarterly, covering heavy redemption requests, difficulty liquidating reserves and settlement outages. Other proposals include a ban on interest payments on MAS-regulated stablecoins, recovery and orderly wind-down plans shared with MAS at least annually, and the technical ability to trace, freeze or destroy tokens linked to illicit activity. The consultation closes at 11.59pm on 16 October 2026.

The Monsoon Ledger reported on October 9 that MAS issued its first two tokenised MAS Bills, on 23 September and 9 October, settled in wholesale CBDC on the SGD Testnet. The tracker lists Singapore's central bank settlement asset as the Singapore dollar wholesale CBDC, used for tokenised MAS Bills since September 2026, with the SGD Testnet as the main platform and BLOOM for commercial bank money and stablecoins. Tokenised bank money on the platform is noted as live at DBS.

MAS's own auction page, dated 18 September 2026, sets out the first tokenised MAS Bill in concrete terms. Auction TD26100F, ISIN SGXZ85101996, was announced on 18 September 2026, auctioned on 21 September 2026, issued on 23 September 2026 and matures on 30 September 2026. The total amount offered was S$1,000,000, with a minimum denomination of S$1,000, sold by uniform price auction with competitive applications expressed as an annual yield to two decimal places. Only institutional investors as defined in Section 4A of the Securities and Futures Act (Cap.289) may apply, and tokenised MAS Bills are non-coupon bearing securities eligible for Qualifying Debt Security tax incentives.

Analysis

The bigger picture here is that Singapore is not trying to abolish private digital money. It is trying to sort it into tiers, with central bank money as the ultimate backstop and stablecoins confined to roles where redemption risk can be managed. Chia's language is careful, but the hierarchy is explicit: deposit tokens above stablecoins, and CBDCs above both. That ordering tells banks, exchanges and fintech firms where MAS expects each instrument to be used. Deposit tokens are pointed at banking use cases such as cash management, stablecoins at crypto exchanges and fintech payments, and central bank money at anchoring monetary stability.

What this really means is that the stablecoin label is being narrowed rather than rejected. The consultation does not ban stablecoins. It imposes reserve backing, capital, redemption at par, disclosure, stress testing at least quarterly, a ban on interest payments, recovery and wind-down plans shared with MAS at least annually, and the ability to trace, freeze or destroy tokens linked to illicit activity. Those are the conditions under which MAS will let a licensed Singapore-dollar or G10-pegged stablecoin operate. The regulator is also willing to recognise a limited number of foreign stablecoins from equivalent regimes and to exempt some multi-jurisdictional issuance arrangements from local incorporation and reserve requirements, which suggests it wants Singapore to remain a venue for issuance rather than a closed market.

Settling tokenised MAS Bills with wholesale CBDC is the operational counterpart to that legal work. A government bill is a low-risk, short-dated instrument, and using it to test wholesale CBDC settlement lets MAS observe finality, redemption and operational resilience without exposing retail holders or large corporate treasuries to a new form of money. The auction terms reinforce the controlled nature of the exercise: S$1,000,000 offered, S$1,000 minimum denomination, institutional investors only, uniform price auction, annual yield to two decimal places. This is a laboratory confined to the wholesale tier rather than a consumer product launch.

Chia's refusal to say whether MAS supports giving systemic stablecoin issuers access to central bank reserves is also telling. Reserve access is the mechanism that makes commercial bank deposits par-equivalent, and extending it to stablecoin issuers would blur the line between bank money and stablecoin money. By leaving the question open, MAS keeps a policy lever it can pull if a stablecoin becomes systemically important, while signalling that such access would come with additional regulatory requirements. Issuers should read the silence as conditionality rather than encouragement.

Why It Matters

For banks such as DBS, OCBC and UOB, the direction of travel is favourable. They already run the deposit and settlement infrastructure that MAS is tokenising, and tokenised bank money is noted as live at DBS on the SGD Testnet. If deposit tokens become the accepted instrument for cash management, incumbent banks gain a new rail for corporate money without ceding the settlement function to non-bank issuers. The 2025 trial settling overnight interbank lending between DBS, OCBC and UOB gave them early operational experience, and the tokenised MAS Bill programme extends that into government securities.

For stablecoin issuers, the message is conditional. A licensed stablecoin under the proposed framework would have to hold reserves at least equal to par, redeem at par, survive quarterly stress tests, avoid paying interest, maintain recovery and wind-down plans, and retain the ability to trace, freeze or destroy tokens linked to illicit activity. Those requirements are compatible with a payments token but sit awkwardly with the idea of a stablecoin as a wholesale settlement asset. The economics of issuing a large wholesale stablecoin under those rules may prove unattractive, which is the outcome Chia's hierarchy implies.

The Monsoon Ledger tracks India's wholesale e-rupee pilot, running since November 2022, and Hong Kong's plan to offer an e-HKD option for government digital bonds with CBDC under EnsembleTX by around end-2026. Singapore's tokenised MAS Bill issuances on 23 September and 9 October 2026 place it in the same experimental lane, with a distinctive emphasis on settling government securities rather than only interbank loans or bonds. If the SGD Testnet programme continues, MAS will have a repeatable wholesale CBDC use case rather than a one-off pilot, a stronger foundation for cross-border interoperability work under Global Layer One.

Next Up

The immediate milestone is 16 October 2026, when the stablecoin consultation closes at 11.59pm. After that, MAS will review submissions and decide how to translate the proposals into legislative amendments to the Payment Services Act. The next operational milestone is less precisely dated: Chia did not announce a public launch date for tokenised MAS Bill settlement. What is already visible is that the first two tokenised MAS Bills were issued on 23 September and 9 October 2026, and further issuances would be required for the programme to move from trial to routine.

MAS is also expected to keep developing the surrounding infrastructure. Through Project Guardian it is expanding commercial tokenisation, and through Global Layer One it is working on common interoperability standards. Its recent publication of the Safeguards for Agentic Finance at Runtime white paper and an open-source reference implementation for controls over AI agents executing financial transactions shows the regulator is treating agentic finance as part of the same settlement stack. The combination of tokenised government bills, wholesale CBDC, deposit tokens and a narrow stablecoin regime gives Singapore a coherent policy architecture.