Stablecoins: outside the DPT definition but still exempt

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The exclusion of currency-pegged tokens from the DPT definition surprises many clients, because a stablecoin is the token most often used as a means of payment. The reason lies in the definition's requirement that the token must not be denominated in or pegged to a currency. IRAS treats a fiat-pegged stablecoin as a derivative, because its value derives from the underlying currency, and derivatives are exempt supplies under paragraph 1(j) of Part I of the Fourth Schedule.¹ The practical result is the same for the exchange of a stablecoin for fiat: no GST. The result differs for the use of a stablecoin as payment. A payment in Bitcoin is disregarded as a supply, while a payment in USDC is technically an exempt supply of a derivative by the payer. For a private individual this changes nothing. For a GST-registered business that pays its suppliers in stablecoins it means that each payment is an exempt supply counted in the business's exempt turnover, with consequences for input tax recovery described below.

The treatment of MAS-regulated single-currency stablecoins under the 2023 framework (see Part K, Chapter VI) has not altered the GST analysis. A regulated SGD stablecoin remains pegged to a currency and therefore remains outside the DPT definition. Tokenised deposits issued by banks are claims on the bank and are treated as the underlying deposit for GST purposes, so that transfers of them are exempt financial services.

Notes

IRAS, e-Tax Guide GST: Digital Payment Tokens, third edition, 30 January 2026, para 5.7 and FAQ 2 (fiat-pegged stablecoins are not DPTs; treated as derivatives exempt under para 1(j), Part I, Fourth Schedule). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.

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Dr Alexander Ressos, TEP

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I am Of Counsel with KGP Legal LLC in Singapore, where I work with a global client base of successful entrepreneurs and their families, independent asset managers, commodity trading houses and other commercial clients. I am a German and Swiss attorney-at-law, also admitted as a solicitor in England & Wales and in Hong Kong. I divide my time between Zug in Switzerland, Singapore and Hong Kong. Since 2017 I have advised international clients on more than 700 crypto and digital asset projects. I also have extensive experience in cross-border litigation and arbitration in Singapore, Hong Kong and other markets in South-East Asia and Greater China.

I operate across the key financial centres in South-East Asia, the Middle East and Switzerland, with a particular focus on asset protection, international tax and estate planning, as well as trusts, company administration and other fiduciary services. My philosophy is to serve as a trusted advisor working closely with my clients and to help them achieve their commercial objectives.

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