The Monetary Authority of Singapore has proposed requiring stablecoin issuers to hold 100% reserves in high-quality liquid assets and to prohibit the passing of yield to stablecoin holders. The yield ban is particularly significant as it draws a sharp regulatory line between stablecoins and interest-bearing instruments, potentially affecting products that blur the distinction. This follows similar conversations in the EU and US around the regulatory perimeter of stablecoin products.
For Armada's crypto desk, any Singapore-domiciled family office or hedge fund counterparty using stablecoin-adjacent settlement rails or tokenized instruments with embedded yield features may face compliance pressure under the proposed MAS framework. Tokenized T-Bills, which carry yield, could be scrutinized depending on how MAS defines the boundary. Legal counsel should assess whether any current or prospective collateral structures would fall within the proposed rules.