Stablecoin regulation is entering a new era as we approach 2025, with leading jurisdictions racing to implement frameworks that balance innovation, consumer protection, and financial stability. The licensing requirements for stablecoin issuers in Singapore, the European Union (EU), and the United States (US) are now sharply defined, yet nuanced in their approach. For legal professionals and crypto businesses navigating this landscape, understanding these distinctions is crucial for strategic compliance and cross-border operations.
Singapore: Tiered Licensing Under the Payment Services Act
Singapore continues to cement its reputation as a digital asset hub by refining its stablecoin regulatory regime. Under the Monetary Authority of Singapore’s (MAS) Payment Services Act (PSA), stablecoin issuers must secure a Major Payment Institution (MPI) License if their circulation exceeds SGD 5 million or if they issue coins pegged to SGD or any G10 currency.
The MAS framework is notable for its stringent reserve asset requirements: reserves must be held in cash, cash equivalents, or AAA-rated short-term sovereign bonds. This ensures a robust 1: 1 backing for all issued stablecoins. Redemption rights are tightly protected – holders must be able to redeem at par value within five business days without unreasonable fees. As of March 2025, MAS introduced a dedicated stablecoin issuance service license streamlining compliance for non-bank entities focused solely on stablecoins.
In addition to capital requirements and AML/CFT controls, MAS mandates that issuers be either banks or registered non-bank financial institutions based in Singapore. This jurisdictional anchoring is designed to bolster regulatory oversight and market integrity.
The European Union: MiCA’s EMI Authorization and Reserve Mandates
The EU’s Markets in Crypto-Assets Regulation (MiCA) has set a new standard for comprehensive digital asset oversight since coming into full effect in June 2024. Stablecoin issuers must obtain authorization as an Electronic Money Institution (EMI) or Credit Institution under MiCA. The framework requires issuers to maintain at least 30% of reserves in EU-based banks, with rules relaxed as of March 2025 to permit up to 50% of reserves in short-term government bonds.
This focus on reserve quality is paired with strict segregation of customer funds and explicit bans on algorithmic stablecoins. MiCA also imposes capital adequacy standards, governance protocols, and transparency obligations – all designed to shield consumers from systemic shocks while fostering pan-European innovation.
| Jurisdiction | Core License Requirement | Reserve Standards | Redemption Rights |
|---|---|---|---|
| Singapore | Major Payment Institution under PSA | 1: 1 backing; cash/cash equivalents/AAA bonds; local registration required | Mandatory par-value redemption within 5 days; no excessive fees |
| EU (MiCA) | EMI/Credit Institution under MiCA | and ge;30% reserves in EU banks; up to 50% in short-term govt bonds post-March 2025; no algos allowed | E-money style redemption protections; strict consumer safeguards |
| US (GENIUS Act) | Money transmitter/federal approval under GENIUS Act and state laws | 1: 1 USD or low-risk assets; regular attestations; AML/CFT compliance mandatory | No explicit federal right but strong consumer disclosure and audit standards emerging |
The United States: GENIUS Act and State-Federal Duality
The US regulatory landscape has long been fragmented between state money transmission laws and evolving federal guidance. This changed markedly with the GENIUS Act’s passage in July 2025, which established a national framework for payment stablecoins while preserving state-level oversight.
The GENIUS Act requires issuers to obtain either a money transmitter license or equivalent authorization at the state level – plus approval from relevant federal agencies if offering payment-focused stablecoins nationally. Critically, all US-licensed issuers must maintain a strict 1: 1 fiat reserve backing with regular attestations and audits. The law embeds AML/CFT obligations across both state and federal levels, aiming for harmonization without stifling competition.
This dual regime allows flexibility but demands rigorous compliance infrastructure from industry participants seeking scale across multiple states or federally regulated markets.
Comparison of Stablecoin Licensing Requirements: Singapore, EU, and US (2025)
| Jurisdiction | License Type / Authority | Reserve Requirements | Issuer Eligibility | Redemption & Consumer Protection | Other Key Requirements |
|---|---|---|---|---|---|
| Singapore | Major Payment Institution (MPI) License under Payment Services Act (PSA) or Stablecoin Issuance Service License (2025) | 1:1 backing with cash, cash equivalents, or AAA-rated short-term sovereign bonds; full redemption at par value within 5 business days | Banks or non-bank FIs registered in Singapore; circulation > SGD 5 million requires license | Full redemption rights at par value; no unreasonable fees; strict redemption timelines | AML/CFT compliance; minimum base capital; MAS oversight |
| European Union (EU) | Electronic Money Institution (EMI) or Credit Institution under MiCA | 1:1 liquid reserves; at least 30% in EU banks; from March 2025, up to 50% in short-term government bonds | EMI or Credit Institution authorized under MiCA; algorithmic stablecoins banned | Segregation of customer funds; strict reserve and redemption rules; consumer protection focus | Capital, governance, and transparency requirements; ECB oversight for foreign issuers |
| United States | Money Transmitter License (state-level) or federal authorization under GENIUS Act (2025) | 1:1 fiat reserve backing with regular attestations; low-risk assets only | Entities approved at state or federal level; must comply with GENIUS Act and/or state laws | Mandatory audits; standards for transparency and consumer protection | AML/CFT compliance; dual state and federal supervision; federal approval for payment stablecoins |
Comparing these three regulatory regimes reveals both convergence and critical divergence in stablecoin licensing and compliance. Each jurisdiction has responded to the unique risks and opportunities posed by stablecoins, resulting in frameworks that reflect local market priorities but increasingly align on core principles: robust reserve backing, clear licensing, and enhanced consumer protection.
Key Points of Divergence: Reserve Composition, Licensing Scope, and Cross-Border Implications
The European Union’s MiCA stands out for its explicit reserve location requirements, mandating at least 30% of reserves be kept within EU-based banks, with a cap of 50% in short-term government bonds after March 2025. This approach is designed to anchor stability within the bloc’s financial system and mitigate contagion from foreign or less regulated markets. The requirement for EMI or Credit Institution status also sets a high bar for operational transparency and governance.
Singapore’s model is more flexible on reserve composition but equally stringent on redemption rights and issuer localization. By requiring all significant stablecoin issuers to be locally registered entities, either banks or non-bank financial institutions, Singapore ensures direct regulatory oversight while allowing innovation through its new stablecoin issuance service license. The insistence on cash, cash equivalents, or AAA-rated sovereign bonds as backing assets reflects MAS’s conservative stance amidst global volatility.
The United States, via the GENIUS Act, takes a hybrid approach: federal standards overlay existing state money transmission regimes. Issuers must maintain 1: 1 fiat backing (with regular attestations), comply with AML/CFT standards, and seek approval from federal agencies if offering payment stablecoins nationwide. However, the lack of an explicit federal redemption right leaves some room for interpretive gaps compared to the EU’s e-money style guarantees.
Strategic Considerations for Global Issuers
For legal professionals advising clients or crypto businesses planning multi-jurisdictional launches, it is crucial to weigh:
- Licensing Pathways: The EU’s EMI route under MiCA is resource-intensive but offers passporting across member states; Singapore’s MPI license provides regulatory clarity within a global financial hub; the US demands navigation of both state licenses and new federal rules under GENIUS.
- Reserve Management: EU requirements may complicate treasury operations for non-EU issuers given geographic restrictions; Singapore emphasizes asset quality over location; US rules focus on fiat equivalency with ongoing attestations.
- Redemption Rights and Consumer Protection: MiCA and MAS provide explicit timeframes and fee controls; US rules are evolving toward similar standards but currently emphasize disclosures over statutory rights.
This landscape is fluid, regulators are already signaling further harmonization efforts (such as ECB calls for stricter equivalence regimes on foreign issuers) that could reshape cross-border issuance strategies by late 2025. For a deeper dive into comparative compliance burdens across these regions, including practical checklists, see our related analysis at Comparing Stablecoin Regulation: US GENIUS Act vs EU MiCA vs UK FCA (2025).
The Road Ahead: Toward Regulatory Harmonization?
The race to regulate is not just about risk mitigation, it is also a contest for global leadership in digital finance infrastructure. While each jurisdiction maintains its own licensing nuances, Singapore’s tiered regime under PSA, the EU’s EMI authorization via MiCA, the US duality of state/federal oversight, the trend toward baseline alignment on reserve quality, transparency, and AML/CFT obligations signals a maturing market structure.
The next phase will likely see increased dialogue among regulators to bridge gaps around passporting rights, recognition of foreign licenses, and common audit standards. For now, issuers must tailor their compliance architectures not only to local laws but also to evolving global best practices, a task demanding agility as well as deep legal expertise.
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