Stablecoin Rules: EU, UAE, Singapore and India

A stablecoin that is legal to issue in one regime is often illegal to market in the next. As of October 2026, the EU and the UAE have binding stablecoin rules in force, Singapore has a finalized policy still being written into law, and India has no stablecoin framework. Every regime with rules demands full reserves and redemption at par; they differ on who may issue, which currencies are allowed, how fast redemption must happen and whether holders may earn anything.

This post covers the legal wrapper, plus the US where it reaches foreign issuers. For the economics, read how stablecoin design choices decide whether a peg holds.

How Do Stablecoin Rules Compare Across the EU, UAE, Singapore and India?

What Does MiCA Require of Stablecoin Issuers in the EU?

MiCA splits stablecoins in two. An e-money token (EMT) references one official currency; an asset-referenced token (ART) references anything else, including a basket. The titles governing both have applied since 30 June 2024.

E-money tokens. Only a credit institution or an electronic money institution may offer an EMT to the public or seek its admission to trading, after notifying and publishing a white paper (Article 48). It must issue at par and redeem "at any time and at par value", with no fee (Article 49). At least 30% of funds received sit in separate accounts at credit institutions, the rest in highly liquid, low-risk instruments in the same currency (Article 54).

Asset-referenced tokens. The issuer must be an EU-established entity authorized under Article 21, or a credit institution (Article 16). It keeps a legally segregated reserve of assets (Article 36) and own funds of at least €350,000, more for larger reserves or overheads (Article 35). Holders redeem at the market value of the referenced assets or by delivery (Article 39).

No interest, from anyone. Neither issuers nor service providers may grant interest on either token, and MiCA counts "any remuneration or any other benefit related to the length of time" a holder keeps the token, including discounts and third-party payments (Articles 40 and 50).

Two rules catch issuers from outside the EU. A dollar-pegged EMT falls under Article 23 through Article 58(3): if its use as a means of exchange within a single currency area passes 1 million transactions and €200 million a day, issuance must stop. And on 8 October 2026, ESMA published an opinion that MiCA-authorized service providers should stop services related to non-MiCA-compliant ARTs and EMTs for EU clients, except those needed to liquidate, convert or withdraw existing holdings, with remaining exposures remediated within three months.

How Are Stablecoins Regulated in the UAE?

Four regulators matter: the peg currency and where the issuer sits decide which leads.

Central Bank of the UAE (mainland). The Payment Token Services Regulation (Circular 2/2024) is in force from 31 August 2024. A dirham token needs a CBUAE license, open only to UAE-incorporated companies outside the financial free zones. The reserve is cash in a segregated escrow account at a UAE-licensed bank outside the issuer's group; a bank's wholly owned subsidiary may hold at least 50% in cash and the rest in UAE government bonds and CBUAE M-bills. Redemption is at par by the same time on the next business day. Capital starts at AED 15 million. Holding-time benefits and algorithmic stablecoins are banned.

The rule founders miss: UAE merchants may accept only licensed dirham tokens as payment for goods and services. Foreign payment tokens from CBUAE-registered issuers may be used only to buy virtual assets or their derivatives.

VARA (Dubai, outside the DIFC). Issuing a fiat-referenced virtual asset (FRVA) is a Category 1 issuance that needs a VARA license, and each FRVA needs approval. Dirham pegs stay with the CBUAE, and FRVAs may not be used to pay for goods or services. Reserves must back 100% of supply in cash or equivalents, government debt maturing within 90 days, repos of seven days or less, or government money market funds. Redemption is at par within one working day, free.

ADGM (Abu Dhabi). Under the FSRA's Conduct of Business Rulebook, an issuer may not issue a dirham fiat-referenced token or carry on regulated activities not incidental to issuance. It redeems at par no later than T+2 after due diligence and keeps reserves at least equal to outstanding claims, valued daily. Interest is not banned: the white paper must disclose any rights to interest or time-based payments.

DIFC. The DFSA regulates which tokens firms may use. Its policy statement lists three fiat crypto tokens assessed as suitable: EURC, USDC and RLUSD. Algorithmic tokens are prohibited.

Are Singapore's Stablecoin Rules in Force Yet?

Not as law. MAS finalized its single-currency stablecoin framework on 15 August 2023 for stablecoins issued in Singapore and pegged to the Singapore dollar or a G10 currency. Its requirements include reserves in the peg currency, held in cash, cash equivalents or government debt with up to three months' residual maturity, valued daily and attested monthly; redemption at par within five business days; and base capital of the higher of S$1 million or 50% of annual operating expenses. Non-bank issuers with S$5 million or less in circulation fall outside it. The framework is a label, not a ban: stablecoins outside it are treated as digital payment tokens, and only licensed issuers may call theirs "MAS-regulated stablecoins".

On 1 September 2026, MAS consulted on amendments to the Payment Services Act to give the framework legal effect. The consultation paper proposes a stablecoin issuance license, bars issuers from other regulated activities and would ban paying holders any return attributable to holding. It also floats recognizing a limited number of foreign-issued stablecoins. Comments closed on 16 October 2026; all of this is still a proposal.

Does India Have a Stablecoin Framework?

No: there is no stablecoin license, reserve rule or redemption standard. The clearest signal of the Reserve Bank's thinking is a December 2025 keynote by Deputy Governor T Rabi Sankar: India's approach "must be guided by caution", CBDCs are "inherently superior", and monetary sovereignty must be safeguarded. That is a speech, not a regulation; see also our case for a VDA sandbox in India.

Tax is clearer. The Income-tax Act, 2025, in force from 1 April 2026, defines virtual digital assets to include any crypto-asset relying on a cryptographically secured distributed ledger, which on its wording covers fiat-pegged tokens. Transfer income is taxed at 30%, with no deduction beyond cost of acquisition and no loss set-off (section 194). A 1% TDS applies to transfer consideration under section 393(1), the provision the Finance Bill, 2026 cites for VDA transfers.

What Does the US GENIUS Act Mean for Issuers Outside the US?

The GENIUS Act, signed on 18 July 2025, is not yet in effect: it takes effect on 18 January 2027, or 120 days after the federal stablecoin regulators issue final regulations if that comes sooner. From 18 July 2028 (three years after enactment), service providers may not offer people in the US a payment stablecoin unless a permitted issuer issued it. Among other conditions, a foreign issuer qualifies only if Treasury finds its home regime comparable, it registers with the Comptroller of the Currency and it holds enough reserves at a US institution to meet US customers' liquidity demands.

Issuers may not pay yield "solely in connection with" holding, a narrower test than MiCA's. CoinDesk reported on 21 October 2026 that the OCC's first final rule declines to presume existing rewards programs comply.

Where Do Multi-Jurisdiction Issuers Get It Wrong?

• Treating "fully backed" as one standard. Eligible reserve assets differ in every regime above.
• Assuming one rewards program travels. A reward that passes the GENIUS Act's "solely" test can still be interest under MiCA.
• Confusing issuance with distribution. ESMA's opinion, the CBUAE's payment rule and the DFSA's list all limit where a lawfully issued token circulates.

Our Web3 Strategy & Digital Asset Advisory practice covers regulatory navigation across MiCA, VARA, RBI, SEBI and MAS, and every model is checked against relevant regulatory classification before it's finalized. If you are mapping a stablecoin across these regimes, book a scoping call.

Frequently Asked Questions

Can a stablecoin issuer pay holders interest or rewards?

Not in the EU or on the UAE mainland. MiCA bans interest on e-money and asset-referenced tokens, including time-based benefits from third parties, and the CBUAE bans benefits tied to holding time. MAS has proposed a ban, the US GENIUS Act bars issuers from paying yield solely for holding, and ADGM requires interest rights to be disclosed.

Can a dollar stablecoin be used to pay for goods in the UAE?

No. Under the CBUAE's Payment Token Services Regulation, a UAE merchant may accept a virtual asset as payment only if it is a dirham payment token from a licensed issuer. Foreign payment tokens from registered issuers may be used only to buy virtual assets, and VARA's rules also bar fiat-referenced virtual assets from paying for goods.

Which stablecoins can firms in the DIFC use?

Only fiat crypto tokens the DFSA has assessed as suitable: EURC, USDC and RLUSD. The DFSA looks at price stability, reserves at least equal to tokens in circulation, segregated custody with regulated institutions, and monthly reserve reports verified by an independent third party. Algorithmic tokens are prohibited in the DIFC.

How are stablecoin gains taxed in India?

As virtual digital assets. Under the Income-tax Act, 2025, in force since 1 April 2026, income from transferring a VDA is taxed at a flat 30%, with no deduction except cost of acquisition and no set-off of losses. A 1% TDS applies to consideration for a transfer. India has no separate stablecoin tax regime.

Sources

This article is general information, not legal or investment advice. Rules and markets change; check the primary sources below before acting.

• EUR-Lex: Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA)
• ESMA: ESMA sets out supervisory expectations on services related to unauthorised stablecoins
• CBUAE Rulebook: Payment Token Services Regulation
• VARA Rulebooks: VA Issuance Categories and Prior Requirements
• VARA Rulebooks: FRVA Rules, General Requirements for VARA Approval
• VARA Rulebooks: FRVA Rules, Reserve Assets
• VARA Rulebooks: FRVA Rules, Redemptions
• ADGM FSRA Rulebook: COBS 19A.3.2
• ADGM FSRA Rulebook: COBS 19A.3.1
• ADGM FSRA Rulebook: COBS 19A.4.1
• ADGM FSRA Rulebook: COBS 19A.7.1
• ADGM FSRA Rulebook: COBS 19A.2.1
• DFSA Rulebook: Policy Statement on Fiat Crypto Tokens
• DFSA Rulebook: GEN 3A.2.3, Use of Algorithmic Tokens prohibited
• MAS: MAS Finalises Stablecoin Regulatory Framework
• MAS: Response to Public Consultation on Proposed Regulatory Approach for Stablecoin-related Activities
• MAS: MAS Consults on Legislative Amendments to Implement Stablecoin Regulatory Framework
• MAS: Consultation on Proposed Amendments to the Payment Services Act for Stablecoin Regulation (P015-2026)
• Reserve Bank of India: Stablecoins – Do They Have a Role in the Financial System (T Rabi Sankar)
• PRS Legislative Research: Income-tax (No. 2) Bill, 2025, as passed by Lok Sabha
• Ministry of Finance: The Finance Bill, 2026
• GovInfo: Public Law 119-27, the GENIUS Act
• CoinDesk: OCC's final rule to start fresh in weighing stablecoin rewards against GENIUS Act ban