SINGAPORE — As of June 30, 2025, digital token service providers (DTSPs) operating out of Singapore will be subject to stricter licensing requirements under new guidelines by the Monetary Authority of Singapore (MAS). The updated framework, clarified in a June 6 announcement, impacts service providers offering digital payment tokens and tokenised capital market products exclusively to overseas customers.
MAS emphasized that these entities must either secure the appropriate licences or cease their operations. The move is part of Singapore’s broader effort to ensure its digital asset ecosystem remains safe, credible, and globally respected.
Anticipated Changes, Not Sudden Moves
Responding to concerns over the timing of the regulatory updates, MAS made it clear that the direction of regulatory travel had been communicated since 2022. The authority stated that any DTSPs caught off-guard had ample time to prepare and adjust their operations in line with Singapore’s evolving regulatory expectations.
MAS also reiterated its selective approach to licensing, noting that it will generally not issue new licences to firms serving only overseas clients. These entities pose higher money laundering and terrorism financing risks due to the cross-border nature of their services.
What the Rules Mean for the Industry
Digital payment tokens, such as Bitcoin, and tokenised capital market products, like blockchain-based securities, are directly affected. However, DTSPs dealing with other types of tokens — such as utility or governance tokens — are not subject to the new regulations.
Firms licensed to serve Singapore-based customers can continue operations as usual and are permitted to offer services overseas. Existing service providers licensed for capital market services and digital payment tokens will remain unaffected.
MAS emphasized that the changes are aimed at enhancing anti-money laundering (AML) oversight while fostering a regulatory environment conducive to responsible innovation.
Industry Reaction: Concerns and Relocations
Despite MAS’ assurances, some DTSPs are reconsidering their Singapore presence. A Bloomberg report noted confusion within the sector, with companies like Bitget and Bybit exploring options to relocate to jurisdictions with softer regulatory stances such as the United Arab Emirates or Hong Kong.
Anonymous industry sources cited by The Straits Times claimed that more than 500 employees across fintech firms may be shifting operations overseas. Roles range from management to junior levels, highlighting a widespread impact.
Industry Leaders Weigh In
Grace Chong, head of financial regulatory practice at Drew & Napier, views the rule update as a continuation of Singapore’s balanced approach. “The new regulations reflect Singapore’s ongoing commitment to a stable and transparent digital asset landscape,” she said. However, she acknowledged that firms are seeking clearer guidelines on how their Singapore-based roles may be perceived under the updated regime.
Similarly, Hannah Puganenthran, compliance head at Independent Reserve Singapore, sees the regulation as a way to level the playing field. “When serious players all meet the same standards, it boosts overall trust and encourages responsible business practices,” she noted. Still, she warned against a blanket application of rules to entities that do not handle customer funds.
MAS Reaffirms Support for Innovation
While tightening retail access to digital assets, MAS continues to push forward with institutional innovations. Project Orchid, launched in 2021, examines the infrastructure for a digital Singapore dollar. Meanwhile, Project Guardian and Global Layer One focus on the use of blockchain technologies in institutional finance.
Gerald Goh, CEO of Sygnum Singapore, believes the recent developments reinforce Singapore’s role as Asia’s leading hub for institutional digital assets. Gong Yefeng, risk and strategy director at HashKey OTC, added that the move should be seen as a step toward sustainable growth and a more credible financial ecosystem.
Conclusion: Regulation for Resilience
MAS’ new licensing requirements for DTSPs underscore Singapore’s intent to regulate the digital asset industry with a long-term view. While some firms may choose to relocate, others appreciate the regulatory clarity that Singapore offers. With a solid foundation and ongoing innovation projects, the city-state aims to remain at the forefront of global digital finance.
