Raymond Cheung
Chartered Actuary · CRO · Board Adviser · Singapore
On 1 September 2026 MAS published draft Payment Services Act amendments requiring single-currency stablecoin issuers to hold reserves at least equal to par value, redeem on demand in the pegged currency, and pay no yield. Strip out the crypto vocabulary and this is an insurance balance sheet — and it needs a board that can govern a promise to pay a fixed amount on demand.
I have sat through risk committee meetings where the entire agenda came down to one question: can this pool of assets meet a fixed obligation on demand, in full, on the worst day we can plausibly imagine? That is an insurance question, and an asset-liability question, and it is answered with duration analysis, liquidity ladders and run scenarios — not with a strategy deck. MAS has just written a version of that question for a new set of companies.
On 1 September 2026 MAS published a consultation on draft amendments to the Payment Services Act to implement its single-currency stablecoin framework, with responses due by 16 October. The core obligations are straightforward to state: an issuer must hold reserve assets at least equal to the par value of every stablecoin in circulation, must meet redemption requests in the pegged currency within timeframes MAS will prescribe, must safeguard customer funds until tokens are delivered, and may not pay yield or interest tied to holdings.
This is an insurance balance sheet
Take away the word stablecoin and you have a liability that is redeemable at a fixed value, on demand, backed by a segregated pool of investable assets. That is the structure of a money-market fund and, in its risk shape, of a short-tail insurer. What keeps it safe is not payments-industry governance or technology governance. It is the unglamorous discipline of matching assets to the liability, laddering liquidity so a wave of redemptions can be met without a fire sale, and stress-testing a run before it happens.
“A stablecoin issuer is running an insurance balance sheet. The board that governs it needs to think like an insurer's board, not a payments start-up's.”
What I would want the board asking
- What is the duration and liquidity profile of the reserves against a defined redemption shock — can we meet, say, 30 per cent redemption within a week without realising losses?
- Who owns the reserve investment mandate, and is it deliberately dull? The rules now forbid passing yield to holders, which removes the excuse for reaching for it in the first place.
- What is our modelled worst-day outflow, and has the board actually seen that scenario and pushed back on the assumptions behind it?
- If the peg comes under pressure intraday, who has the authority to act, on what triggers, and within what timeframe?
Singapore is regulating stablecoins as a stability product, not as a piece of technology. The issuers that cope with this framework will be the ones whose boards already know how to govern a promise to pay a fixed amount on demand. That is a skill set the insurance and asset-management sectors have built over decades. Most firms coming to stablecoin issuance from the crypto side have not — and the transition period is the time to bring that expertise onto the board, not after the first redemption spike.
Common Questions
What do MAS's proposed stablecoin rules require issuers to hold in reserve?
Under the draft Payment Services Act amendments published on 1 September 2026, a regulated single-currency stablecoin issuer must hold reserve assets at least equal to the par value of all stablecoins in circulation, meet redemption requests in the pegged currency within MAS-prescribed timeframes, and safeguard customer funds until the stablecoins are delivered. Issuers are also barred from paying yield or interest tied to holdings. The consultation closes on 16 October 2026.
Why should a stablecoin issuer's board think like an insurance board?
Because the underlying structure is the same: a liability redeemable at a fixed value on demand, backed by a pool of investable assets. The governance that matters is asset-liability matching, liquidity laddering and run-scenario stress testing — the disciplines an insurer's board risk committee already runs — rather than the product, growth and technology focus of a typical payments firm.
What should a board ask about stablecoin reserve management?
Ask for the liquidity and duration profile of the reserves against a defined redemption shock, who owns the investment mandate and how conservative it is, the modelled worst-day outflow and whether the board has stress-tested it, and the decision rights and timeline if the peg comes under pressure intraday.
About the author
Raymond Cheung is a Chartered Actuary, C-suite executive and board adviser with more than 20 years of experience across Asia in risk management, insurance, ESG and corporate governance. He is the CEO of CER Consultancy and an accredited trainer at SMU Academy and the Singapore College of Insurance.