Singapore’s central bank has warned that unregulated stablecoins could cause big problems in the financial system.
At the Singapore FinTech Festival on Thursday, 13 November 2025, Chia Der Jiun, MAS Managing Director, said only stablecoins with proper rules and full backing can be used for big transactions. He added that MAS is making new laws to keep digital money safe
Chia said, “Unregulated stablecoins have a patchy record of keeping their peg.” Moreover, he compared their failures to the money-market fund problems of 2008.
He explained that weakly regulated coins could lose trust and cause losses across the market. “While agility is a strength, stability needs to be reinforced,” Chia said. Therefore, MAS wants to make sure only well-supervised coins are used for big transactions.
MAS has already released rules this year for single-currency stablecoins. These rules focus on strong backing and reliable redemption for all eligible coins. Chia noted that the rules may change as stablecoins become more common in financial systems.
He added that if some regulated coins grow very large, more rules and international cooperation may be needed.
Singapore is also exploring other forms of digital money. Chia highlighted the use of central bank digital currencies (CBDCs) and tokenized bank money. Through its BLOOM initiative, MAS is testing these instruments and working with banks and networks to run trials.
Notably, three banks, DBS, OCBC, and UOB, have already used a wholesale CBDC for overnight lending successfully. The central bank plans more trials next year with tokenized government bills.
Chia stressed that digital money needs safety as much as speed. While MAS is encouraging innovation, it wants users to trust the system. The goal is to have stable digital money that works across networks, countries, and financial services. Addtionally, he said financial networks must be strong and standardized to handle digital assets safely.
MAS has supported FinTech for over ten years. They started programs like Project Guardian to try out tokenized assets. Chia said tokenized money can make payments faster and cheaper. Still, it needs clear rules and strong systems to work well.
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