Singapore has become one of the most proactive jurisdictions when it comes to cryptocurrency regulation, developing a comprehensive framework that balances innovation and risk management. While the EU Crypto Asset Markets (MiCA) While the regulations provide for a single, unified regime across Europe, Singapore’s approach fits within existing financial laws and targets new rules. THE Monetary Authority of Singapore (MAS)the country’s central bank and financial regulator, has gradually increased crypto oversight, especially after events such as the market turmoil of 2022 (e.g. the Terra/Luna crash And FTX collapse).
Today, Singapore’s regime emphasizes consumer protection, prudent licensing, and the stability of digital asset markets. Today’s article explores Singapore’s regulatory framework for crypto, covering its licensing system, investor safeguards, stablecoin rules, approach to DeFi, and implications for industry players.
A rigorous licensing framework based on the Payment Services Act
Crypto regulation in Singapore is primarily based on the Payment Services Act 2019 (PSA). The PSA introduced the concept of Digital Payment Tokens (DPT)covering cryptocurrencies such as Bitcoin and Ether. Any company offering DPT services in Singapore, exchanges, brokers, depositories or transfer services must hold a MAS license.
There are two types of licenses. A Standard payment institution the license applies to small operators below transaction thresholds. A Major payment institution the license applies to large companies. Operating without a license is a criminal offense.
Licensing is not cosmetic. MAS enforces all anti-money laundering and anti-terrorism financing rules, including customer due diligence, suspicious transaction reporting and compliance with the FATF Travel Rule. Technology risk controls and governance standards mirror those applied to traditional financial institutions. This is intentional. MAS has repeatedly stated that crypto intermediaries should meet the same basic expectations as banks and payment companies.
In 2022, Singapore has gone further. THE Financial Services and Markets Act (FSMA) extended MAS oversight to crypto companies incorporated in Singapore and serving clients out Singapore. As of June 30, 2025, these companies must hold a Digital Token Service Provider (DTSP) license or cease all activity abroad. MAS made it clear that approvals would be rare, citing increased risks of money laundering and surveillance.
The message is direct: Singapore is not a regulatory flag of convenience. Businesses that obtain a DTSP license will be required to meet the same rigorous standards (e.g. minimum capital base ~250,000 Singapore dollarsstrict AML, technology risk controls) to ensure they operate safely.
Prioritize retail guarantees over speculation
Retail protection is the area where Singapore’s framework is most restrictive. MAS does not view crypto as a consumer product to be promoted. He considers it a high-risk financial activity.
Retail customers must submit to a risk awareness assessment before negotiating. Crypto companies are prohibited from offering incentives such as referral bonuses or trading rewards. Leveraged and credit-financed purchases of cryptocurrencies are prohibitedincluding the use of credit cards.
Advertising rules are strict. Public advertising of crypto services, on public transport, on billboards or in mass media, is effectively prohibited. Marketing is limited to controlled company websites and channels, and even then it should not trivialize risk. Bitcoin ATMs were phased out in early 2022 under this policy.
The custody rules are just as strict. Client assets must be segregated and held in trust. MAS expects that most of clients’ crypto assets will be kept in cold storage. Daily reconciliation is necessary. Businesses cannot mix customer assets with their own.
Lending and staking of cryptocurrencies through intermediaries is forbidden for retail customers. Institutional and accredited investors can access these services, but only with explicit information and consent. This rule directly reflects lessons from global failures such as Celsius, TravelerAnd FTX.
A framework dedicated to high stability stablecoins
In August 2023, MAS finalized a dedicated project stablecoin regulatory frameworkone of the most detailed in the world. It applies to single currency stablecoins indexed to the Singapore dollar or G10 currencies and issued in Singapore.
Issuers must maintain 100% reserve support in low-risk assets and in the same currency. Reserves must be segregated, independently audited and publicly attested monthly. Issuers must comply with a minimum base capital of S$1 million or 50% of annual operating expenseswhichever is higher.
Reimbursement at par is mandatory in five working days. Issuers are limited to issuing stablecoins only and cannot engage in other crypto activities. Only compliant tokens can carry the label “Stablecoin regulated by MAS. »
At the time of writing, the framework is finalized but is still undergoing full legislative implementation. Once operational, it will effectively separate credible payment grade stablecoins from everything else.
Regulating Gateways: MAS’s Approach to DeFi
Purely decentralized finance remains largely outside of direct regulation, as there is often no legal entity to supervise. MAS took a pragmatic approach. Rather than attempting to regulate protocols, it focuses on intermediaries, access points and exposure to risks.
Through initiatives such as Project GuardianMAS has tested institutional-grade DeFi use cases involving tokenized bonds and liquidity pools under controlled conditions. The objective is not deregulation, but experimentation within the framework of safeguards. When DeFi interfaces with licensed entities, existing rules apply.
Stability over volume: the intentional design choice
Singapore’s crypto framework prioritizes stability over volume. Retail speculation is discouraged. Institutional use is welcome. Compliance costs are intentionally high.
For the industry, this eliminates weaker players while rewarding companies willing to operate as financial institutions. For policymakers, it offers a clear model: crypto can exist inside the system, but not on top of or outside of it.
Author: Ayanfe Fakunle
The #DisruptionBanking editorial team has taken every precaution to ensure that no person or organization has been harmed or offered financial advice in this article. This article is definitely not financial advice.
See also:
MiCA 2025: crypto winners and losers in Europe | Disruption Bank
What is the GENIUS Act? Banks and Fintechs rush to Stablecoins | Disruption Bank
