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The Monetary Authority of Singapore (MAS) has clarified the scope of its regulatory regime for digital token service providers (DTSPs), crypto-assets used for payments.
The regulator issued a confirming that firms offering certain digital asset services to overseas customers will soon need to be licensed.
The new requirement forms part of Singapore鈥檚 implementation of the Financial Services and Markets Act 2022 (FSM Act), with the relevant provisions coming into force on June 30, 2025.
MAS finalised the details of the regime on May 30, following a public consultation launched in October last year.
Under the framework, DTSPs must be licensed if they provide services involving digital payment tokens (DPTs) or tokens representing capital market products to customers located outside Singapore.
MAS has made clear that it will adopt a highly cautious approach to licensing such firms, given the greater risks posed by the internet-based and cross-border nature of these activities.
It expects to grant licences only in 鈥渆xtremely limited鈥 circumstances, where applicants can demonstrate strong justifications, credible governance structures, and compliance with international regulatory standards.
Without a licence, providers will need to suspend or cease the provision of regulated services by the commencement date.
Risk to Singapore
MAS has also emphasised that these activities present heightened reputational risks to Singapore should they be exploited for illicit purposes, despite having little or no direct link to the domestic financial system.
To mitigate these risks, MAS will not provide a transition period for firms to continue operating while awaiting a licence decision.
Instead, DTSPs were given notice through the consultation process and will receive a formal four-week notification prior to the rules taking effect. Only a small number of firms are expected to be affected.
The regime will also not apply to providers that deal solely with tokens used for utility or governance purposes, which fall outside the scope of financial regulation under the FSM Act.
Similarly, Singapore-based firms licensed under the Payment Services Act or Securities and Futures Act may continue offering services to both local and overseas customers, provided they remain compliant with those frameworks.
The new licensing regime also imposes minimum financial and governance requirements on successful applicants, including a base capital requirement of S$250,000 ($194,000) and mandatory appointment of a compliance officer at management level, who must be based in Singapore.
Firms must also maintain adequate technology risk management and cybersecurity controls, reflecting the dependence of token services on complex distributed ledger infrastructure.
鈥淢AS鈥 position on this has been consistently communicated for a few years since the first response to public consultation issued on 14 February 2022 and in subsequent publications on 4 October 2024 and 30 May 2025,鈥 the regulator said.
Business as usual for most
The latest move is consistent with the Singapore regulator鈥檚 no-nonsense approach to crypto operations from the Asian financial hub.
However, although MAS may appear to be taking a tough approach, its new position is unlikely to affect the bigger players, such as Coinbase and Crypto.com.
Rather, the decision will likely force offshore-only crypto firms to either exit Singapore or relocate to other jurisdictions that are more welcoming to such business models 鈥 and likely less respected than the city-state.
It is an unsurprising move, and emphasises that Singapore does not want a reputation for hosting potentially bad actors in the crypto space.
Housing offshore financial services can risk consequences such as inclusion on the Financial Action Task Force鈥檚 (FATF) grey list 鈥 as was the case for the United Arab Emirates and Malta 鈥 and a reputation for letting in riskier entities.
