Singapore reveals plans to rein in stablecoin laws and experiment with tokenized bills

Chia Der Jiun, the Managing Director at MAS, announced that Singapore aims to regulate stablecoin laws and experiment with tokenized bills. Chia emphasized that the Monetary Authority of Singapore (MAS) has built a vibrant FinTech ecosystem with over 1,800 FinTech firms operating across various domains. To support these initiatives, MAS launched the BLOOM initiative, which promotes trials with tokenized bills and regulated stablecoins for settlement.

Chia invited Financial Institutions (FIs) and clearing and settlement network operators to participate in the trials under the BLOOM initiative. He noted that three major Singapore banks—DBS Bank, United Overseas Bank (UOB), and Oversea-China Banking Corporation (OCBC)—have already successfully conducted interbank overnight lending transactions using Singapore dollar-backed Central Bank Digital Currencies (CBDC). This marks the first live trial issuance of tokenized Singapore dollar-backed CBDC.

Over the past decade, MAS has supported hundreds of innovation projects and established numerous innovation centers. Recognizing the significance of technology, MAS created a regulatory sandbox to test out innovative business models with regulatory flexibility. Looking ahead, MAS plans to trial tokenized MAS bills for settlement with CBDC and continue empowering innovation in Singapore's financial ecosystem.

Chia disclosed that MAS is moving towards greater regulatory clarity and will release a Guide on the Tokenization of Capital Market Products soon. This guide will feature case studies to shed light on the treatment of tokenized financial products, such as bills. It will also include guidance on disclosure requirements and be updated periodically as tokenization practices evolve.

MAS recognizes that specificities in tokenization and blockchain networks demand more regulatory and legal clarity. Many regulators have adopted a technology-neutral approach, applying regulatory standards based on economic and legal substance. MAS is collaborating with industry players and international counterparts to overcome adoption barriers for asset-backed tokens. Chia encourages collaborations with market participants and regulators to mature the tokenization ecosystem and bridge existing adoption gaps.

MAS stated that stablecoins and tokenized bills require institutional-grade blockchain networks to achieve foundational attributes like secure performance, regulatory compliance, and privacy options. To address this, stakeholders are developing customizable private blockchains and permissioned layers on public blockchain networks. However, MAS believes clear regulatory compliance and industry standards are crucial for building confidence in these networks.

Chia highlighted the GL1 Market Infrastructure Toolkit, which was developed under the Global Layer One initiative. This toolkit assists Financial Institutions and network operators in verifying whether blockchain systems comply with internationally recognized regulatory standards, such as PFMI, and market practices like the DAS CP. With 108 controls, this toolkit aims to help build trust in compliant blockchains, ensuring their suitability for institutional use.