Singapore wants to put shackles on stablecoins: ban interest payments. This time isn’t tightening—it’s about seizing pricing power
The Monetary Authority of Singapore (MAS) has proposed banning regulated stablecoins from paying interest to holders, directly targeting the ability of stablecoins’ “last-mile” to compete with banks for business.
On September 1, MAS issued a consultation paper. In the draft legislation, it sets out three items: first, stablecoins regulated by MAS are not allowed to pay interest to holders; second, issuers must conduct stress tests and prepare recovery plans; third, it must strengthen protection of customers’ assets. It also leaves a loophole, allowing jointly issued and certain stablecoins overseen by overseas regulators to enter the Singapore market.
Put simply, the knife cuts exactly where it matters. The reason stablecoins can siphon away deposits is that on-chain yields are more attractive than banks’ demand-deposit rates. Once interest is banned, stablecoins effectively revert to a “payment instrument” role rather than becoming a “wealth-management product.” This aligns with the thinking behind the US GENIUS bill—global regulators, in tacit agreement, are moving stablecoins toward de-yielding.
One-sentence translation: Regulators don’t oppose you issuing coins, but they oppose you grabbing banks’ deposit business.
Market impact
Short term: neutral to bearish. This is still in the consultation stage, not full implementation, but it clearly suppresses stablecoin narratives. Stablecoin projects that promise interest will see their story damaged, and some funds will reassess the upside they imagined for this space. BTC is currently $77,228.5, down 1.42% over 24 hours. Since the market is already weak, this kind of news will make sidelined capital even more hesitant.
Medium term: positive for the industry’s long-term health, but bearish in the short term. Requirements such as stress testing, recovery plans, and customer asset protection will raise issuance costs. Smaller issuers may be pushed out—ultimately leaving only a few licensed giants. Opening a door to accept compliant overseas stablecoins in Singapore, in essence, is about taking regulatory pricing power from Hong Kong and the US.
My view
Bearish short term. BTC has been drifting lower around $77,228.5, and ETH at $2,408.67 is down 2.09%. The market lacks follow-through buying power; tightening-style regulatory news like this at this level is likely to be amplified in interpretation. A key support below BTC sits around the 75K zone—breaking it could open new downside room. There’s still a gap between regulatory consultation and implementation, but if the EU and the US follow the “ban interest” approach, the valuation logic for the stablecoin sector will need to be rewritten. The risk is that if the final rules are loosened, the bearish pressure could turn into a “shoe dropping” event.
- Assets: BTC / ETH
- Direction: bearish 📉 forecast to fall
- Duration: BTC 12 hours / ETH 24 hours
$BTC $ETH #BTC #ETH
📊 Historical backtest
- After similar news like “Bitcoin trading slows down and market interest declines” (2024-09-12) was released, BTC 12h performance was +0.76%. The prediction was bearish ❌ wrong
- There are 136 historical pieces of bearish-type BTC news in total; in 64 cases, the predicted direction matched the actual move (accuracy 47%)
⚠️ Not investment advice
The Monetary Authority of Singapore (MAS) has proposed banning regulated stablecoins from paying interest to holders, directly targeting the ability of stablecoins’ “last-mile” to compete with banks for business.
On September 1, MAS issued a consultation paper. In the draft legislation, it sets out three items: first, stablecoins regulated by MAS are not allowed to pay interest to holders; second, issuers must conduct stress tests and prepare recovery plans; third, it must strengthen protection of customers’ assets. It also leaves a loophole, allowing jointly issued and certain stablecoins overseen by overseas regulators to enter the Singapore market.
Put simply, the knife cuts exactly where it matters. The reason stablecoins can siphon away deposits is that on-chain yields are more attractive than banks’ demand-deposit rates. Once interest is banned, stablecoins effectively revert to a “payment instrument” role rather than becoming a “wealth-management product.” This aligns with the thinking behind the US GENIUS bill—global regulators, in tacit agreement, are moving stablecoins toward de-yielding.
One-sentence translation: Regulators don’t oppose you issuing coins, but they oppose you grabbing banks’ deposit business.
Market impact
Short term: neutral to bearish. This is still in the consultation stage, not full implementation, but it clearly suppresses stablecoin narratives. Stablecoin projects that promise interest will see their story damaged, and some funds will reassess the upside they imagined for this space. BTC is currently $77,228.5, down 1.42% over 24 hours. Since the market is already weak, this kind of news will make sidelined capital even more hesitant.
Medium term: positive for the industry’s long-term health, but bearish in the short term. Requirements such as stress testing, recovery plans, and customer asset protection will raise issuance costs. Smaller issuers may be pushed out—ultimately leaving only a few licensed giants. Opening a door to accept compliant overseas stablecoins in Singapore, in essence, is about taking regulatory pricing power from Hong Kong and the US.
My view
Bearish short term. BTC has been drifting lower around $77,228.5, and ETH at $2,408.67 is down 2.09%. The market lacks follow-through buying power; tightening-style regulatory news like this at this level is likely to be amplified in interpretation. A key support below BTC sits around the 75K zone—breaking it could open new downside room. There’s still a gap between regulatory consultation and implementation, but if the EU and the US follow the “ban interest” approach, the valuation logic for the stablecoin sector will need to be rewritten. The risk is that if the final rules are loosened, the bearish pressure could turn into a “shoe dropping” event.
- Assets: BTC / ETH
- Direction: bearish 📉 forecast to fall
- Duration: BTC 12 hours / ETH 24 hours
$BTC $ETH #BTC #ETH
📊 Historical backtest
- After similar news like “Bitcoin trading slows down and market interest declines” (2024-09-12) was released, BTC 12h performance was +0.76%. The prediction was bearish ❌ wrong
- There are 136 historical pieces of bearish-type BTC news in total; in 64 cases, the predicted direction matched the actual move (accuracy 47%)
⚠️ Not investment advice