MAS Chief Says Stablecoins May Not Be Fit for Large Wholesale Settlement

Stablecoins cannot be assumed to hold their par value and may be unsuitable for settling large wholesale transactions, Monetary Authority of Singapore managing director Chia Der Jiun said in a keynote at the INSEAD Digital Finance & Agentic AI Summit on October 9.

Chia drew a distinction between commercial bank deposits and stablecoins. Deposits maintain value parity because they can be exchanged at par for central bank reserve money, he said, adding that "this is not a given for stablecoins." Confidence in a stablecoin's ability to hold par "must instead be achieved primarily through transparency and adequacy of reserve assets," and "there may be limits to their suitability for settling large wholesale transactions."

He also pointed to the policy questions that follow if the sector keeps growing. "Should some stablecoins become systemically important, the need to anchor value stability of these coins increases," Chia said, noting that there have been 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 remarks place stablecoins below deposit tokens and central bank money in MAS's view of how tokenised markets should settle. Chia said deposit tokens are likely to find acceptance in banking use cases such as cash management, while stablecoins "may find wider adoption on crypto exchanges and in fintech payments." He said that as private digital money scales, "CBDCs will ultimately be needed to anchor monetary stability."

MAS has been building that layer. A wholesale Singapore dollar CBDC has been available through the SGD Testnet since 2025, when DBS, OCBC and UOB completed the first live trial settling overnight interbank loans with it. Chia said MAS is now moving to settle tokenised MAS Bills with the wholesale CBDC, a trial first announced last November.

The speech lands while MAS is still writing stablecoins into law. Its consultation on amendments to the Payment Services Act, published on September 1 and closing on October 16, would require licensed issuers to hold reserves at least equal to the par value of coins in circulation and to redeem at par. It also proposes letting MAS recognise a limited number of foreign stablecoins from equivalent regimes and exempt some multi-jurisdictional issuance arrangements from local incorporation and reserve requirements.

Chia's comments do not change those proposals, but they indicate how far MAS expects regulated stablecoins to reach. The regulator is writing rules to make them safe for retail and crypto-market use, while keeping wholesale settlement anchored in bank and central bank money.