The Singapore monetary authority (Mas) announced the results of one of its latest consultations which have an impact these companies can be formed in Singapore but must cease operations by the end of the month (June 30, 2025) or obtain a license, which, according to Mas, would only rarely be granted.
This decision stems from the legislation which divides the license of “digital token service providers” in those who provide services to Singapore compared to others who target offshore customers. Service providers active in Singapore must be approved in accordance with the Payment Services Act, while those who target offshore customers fall under the law on financial services and markets.
Mas is concerned about the impact of potential reputation on Singapore where companies register in Singapore for tax purposes, but do not actually provide services in Singapore or do not present any significant presence. Silver whitening is a key concern, especially if the main operations are outside Singapore, which makes the MAS difficult to exercise surveillance. This surveillance challenge is the reason why Mas will rarely grant licenses to companies focused on tenders – without contact points in Singapore, effective regulation becomes almost impossible.
Following the two laws, Mas implemented two sets of regulations. Payment service licenses for digital tokens in Singapore have been operational for some time, while offshore regulations have not been implemented so far. When Mas consulted in October, he warned that there would be no long transition period, probably to encourage companies to start offering land operations and obtain a license, or to leave Singapore completely.
Several high -level companies such as Circle and Paxos already have licenses such as main payment institutions and have Singapore operations, so would not be affected by these new regulations.
In Singapore or outside?
On Linkedin, Gibson Dunn’s lawyers have debated nuances of what it means to be “ “ à Singapore ” against “ `outside of Singapore ”, noting that it is not only a question of managing the customers of Singapore, but also of having operations in Singapore – strengthening the position of MAS on supervision requirements.
