Regulated stablecoins offer prospect of value stability, says MAS chief

Regulated stablecoins offer the prospect of “value stability”, unlike unregulated ones that have a patchy record of keeping their peg, according to Monetary Authority of Singapore (MAS) managing director Chia Der Jiun.

- Timothy Goh

Stablecoins are a type of cryptocurrency that aims to limit price volatility by pegging its value to a currency, commodity or financial instrument.

“Recurrent de-pegging can erode confidence, and trigger runs on other stablecoins,” said Mr Chia.

“We saw a similar dynamic in 2008 when money market funds that broke the buck triggered runs on other money market funds.

“Such unregulated stablecoins would not be suitable as safe settlement assets for large wholesale transactions.”

Mr Chia was speaking on Nov 13 during a keynote address at the Singapore FinTech Festival 2025.

The central bank chief noted in his speech that sound and robust regulation of stablecoins is critical to their stability.

“We have seen national regulations taking shape rapidly... But things can take a wrong turn if there is a proliferation of poorly regulated stablecoins, undermining confidence in others,” he said.

Mr Chia said MAS recognises the need to regulate stablecoins and has finalised the features of its stablecoin regulatory regime, with a draft legislation being prepared.

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

“Over time, if some regulated stablecoins become systemic, regulatory frameworks will need to be strengthened further, cross-border regulatory cooperation enhanced, and access to central bank facilities considered.”

In his speech, Mr Chia also touched on tokenised assets, or what he calls “asset-backed tokens”.