Singapore Moves To Ban Stablecoin Yield

Singapore's financial watchdog has suggested regulatory changes that would prohibit stablecoins from offering yield to investors. The Monetary Authority of Singapore is considering an amendment to the Payment Services Act to effectively prohibit stablecoin issuers from paying any yield. Stablecoins are cryptocurrencies with values tied to a reserve asset, typically the U.S. dollar.

MEXC has launched an Earn Plus service with a limited-time event offering up to an 800% APR booster. Bitmine accelerated Ethereum purchases to wrap up August. MEXC data shows Bitcoin breaking $80,000 and major-asset spot trading volume surging 300%. The new rules would mandate issuers to hold assets equivalent to at least 100% of all tokens in circulation at all times, and in separate accounts from the issuers' own funds.

The regulator argues that stablecoins should be used for payments, not as investment products or for generating yield similar to bank savings account interest. The new rules would entirely ban stablecoin issuers from paying interest or other benefits to customers' stablecoin holdings. Singapore's approach mirrors other jurisdictions, as the U.S. GENIUS Act and the EU's Markets in Crypto-Assets (MiCA) regulation also forbid stablecoins from paying interest or yield to investors.

Financial institutions like JPMorgan Chase have opposed stablecoins providing yield, asserting it would compete with and harm their retail banking businesses. The consultation period for Singapore's proposed new rules and stablecoin yield ban closes on October 16. No implementation date has been set. The two largest stablecoins are Tether's USDT and Circle Internet Group's USDC. CRCL stock has fallen 25% over the past 12 months, trading at $90.06 per share.