Statement on the FSC Guidance Notes on Stablecoins
We are proud to have collaborated with the Financial Services Commission (FSC) with respect to the Guidance Notes on Stablecoins which was issued on 13 August 2026 under section 7(1)(a) of the Financial Services Act and section 6(1)(d) of the Virtual Asset and Initial Token Offerings Services Act 2021 (“VAITOS Act”).
Introduction
A stablecoin is a virtual asset designed to maintain a stable value relative to a specified asset, or a pool or basket of assets. Originally conceived as a less volatile entry point for trading in virtual assets, stablecoins have evolved significantly with the rise of decentralised finance (“DeFi”) applications and are now used for a broad range of purposes, carrying implications for the wider financial system.
The issuance of these Guidance Notes represents a landmark development for the digital asset regulatory landscape of Mauritius. Mauritius was amongst the first jurisdictions globally to adopt a fully comprehensive virtual and digital asset legal and regulatory framework through the enactment of the VAITOS Act in 2021. With the addition of these stablecoin-specific guidelines, Mauritius now stands out as one of the very few jurisdictions in the world to have a fully comprehensive virtual asset framework — one which encompasses the travel rule and is fully compliant with the 40 Recommendations of the Financial Action Task Force (“FATF”).
Backed by over 30 years of experience as an international financial centre, Mauritius offers not only deep expertise in supporting financial services businesses but also the institutional and regulatory stability that is increasingly recognised as a key factor by market participants when selecting a jurisdiction for digital asset activities.
Summary of the Guidance Notes Scope and Regulatory Authority
The Guidance Notes apply to all persons who issue and/or provide stablecoin-related services in or from Mauritius, who must hold the relevant licence and/or registration under the VAITOS Act. Any stablecoin pegged to fiat currencies (other than the Mauritian Rupee) and used solely for investment purposes will be regulated by the FSC. Where a stablecoin is pegged to a fiat currency (including the Mauritian Rupee) and issued in or from Mauritius, it falls under the FSC’s regulatory purview but also requires a no-objection from the Bank of Mauritius. Stablecoins offered as payment instruments domestically require a licence from the Bank of Mauritius under the National Payment Systems Act.
Categorisation of Stablecoins
The Guidance Notes distinguish two broad categories:
Asset-linked stablecoins – these are backed or collateralised by underlying reserve assets (funds, securities or other non-virtual assets) to maintain a stable value relative to referenced assets.
Algorithmic stablecoins – generally unbacked virtual assets that attempt to maintain value through supply-adjustment protocols.
Importantly, the FSC will not consider applications for the issuance, distribution, or facilitation of algorithmic stablecoins or yield-bearing stablecoins in or from Mauritius, owing to the risk characteristics associated with such arrangements.
Regulatory Treatment
The FSC adopts the principle of “same risks, same rules” and a substance-over-form approach in its regulatory focus. Stablecoins are treated as virtual assets under Section 2 of the VAITOS Act. Any direct offer for sale of stablecoins to the public is considered an “initial token offering” and the issuer must be registered accordingly.
Key Requirements for Issuers
Issuers of stablecoins are subject to a range of requirements, including:
Maintaining the higher of MUR 5 million or 50% of annual operating expenses (or such percentage of reserve assets as determined by the FSC) as minimum unimpaired stated capital.
Holding liquid assets (cash, cash equivalents, Bank of Mauritius securities, Government of Mauritius securities, high-quality central bank securities, and bank deposits) valued at the higher of 50% of annual operating expenses or an amount sufficient for orderly winding-up.
Implementing a robust operational risk and resilience framework.
Publicly disclosing reserve asset values daily and composition weekly.
Appointing an independent expert acceptable to the FSC to attest the value of reserve assets monthly and conducting an annual audit.
Ensuring redemption of stablecoins at par value within 5 days of any holder request.
Prudential Requirements for Reserve Assets
The Guidance Notes impose strict prudential standards on reserve assets:
Reserve assets must be adequate to cover the full value of the stablecoin.
They must be held in distinct accounts and segregated from the issuer’s own assets.
Reserve assets may not be pledged, re-hypothecated, or re-used, except for creating liquidity to meet redemption requests.
Daily mark-to-market valuation is required, with the net value of reserves equalling or exceeding the aggregate peg value of all outstanding stablecoins at all times.
For stablecoins pegged to currencies, reserve assets must comprise assets with minimal market and credit risk, capable of rapid liquidation.
Reserve assets must be denominated in the same currency or currencies as the peg value.
Hybrid Stablecoin Arrangements
The Guidance Notes address scenarios where stablecoins may exhibit characteristics of other financial instruments:
A stablecoin linked to individual securities with a contractual delivery right would be classified as securities.
A stablecoin linked to a collective investment portfolio with a contractual claim may be treated as shares under the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008.
A stablecoin linked to commodities with a contractual claim may be classified as a derivative and treated as securities.
AML/CFT and Governance
All participants in stablecoin arrangements must comply with anti-money laundering and combatting the financing of terrorism obligations, information technology and cybersecurity requirements, and establish robust governance and risk management frameworks. The board and senior management bear collective responsibility for the safety and soundness of the arrangement, including protection of stablecoin holders during periods of stress.
International Standards Alignment
The Annexure to the Guidance Notes aligns with standards and principles from the BCBS, IOSCO, and FSB, including governance, reserve asset quality, redemption rights, transparency, operational resilience, and wind-down planning. The FSB’s core expectations, IOSCO’s investor protection principles, and BCBS’s prudential framework are all reflected in the regulatory approach adopted by the FSC.
Investor Caution
The Guidance Notes remind investors that stablecoins are not necessarily subject to reduced price volatility, should not be considered intrinsically safe investments, are not recognised as legal tender in Mauritius, and are not protected by any statutory compensation.
