Singapore has emerged as one of the most proactive jurisdictions in regulating cryptocurrencies, crafting a comprehensive framework that balances innovation with risk management. While the EU’s Markets in Crypto-Assets (MiCA) regulation provides a single unified regime across Europe, Singapore’s approach is built into existing financial laws and targeted new rules. The Monetary Authority of Singapore (MAS), the country’s central bank and financial regulator, has progressively tightened crypto oversight, especially after events like the 2022 market turmoil (e.g., the Terra/Luna crash and FTX collapse).
Today, Singapore’s regime emphasizes consumer protection, prudent licensing, and stability in digital asset markets. Today’s feature explores Singapore’s crypto regulatory framework, covering its licensing system, investor safeguards, stablecoin rules, approach to DeFi, and the implications for industry players.
A Rigorous Licensing Framework Built on the Payment Services Act
Crypto regulation in Singapore rests primarily on the Payment Services Act 2019 (PSA). The PSA introduced the concept of Digital Payment Tokens (DPTs), covering cryptocurrencies such as Bitcoin and Ether. Any firm offering DPT services in Singapore, exchanges, brokers, custodians, or transfer services must hold a MAS licence.
There are two licence types. A Standard Payment Institution licence applies to smaller operators below transaction thresholds. A Major Payment Institution licence applies to larger firms. Operating without a licence is a criminal offence.
Licensing is not cosmetic. MAS applies full AML and counter-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 baseline expectations as banks and payment firms.
In 2022, Singapore went further. The Financial Services and Markets Act (FSMA) extended MAS oversight to Singapore-incorporated crypto firms serving customers outside Singapore. From June 30, 2025, such firms must hold a Digital Token Service Provider (DTSP) licence or cease overseas activity. MAS has been clear that approvals will be rare, citing heightened money-laundering and supervisory risks.
The message is blunt: Singapore is not a regulatory flag of convenience. Firms that do obtain a DTSP license will have to meet the same robust standards (e.g. minimum base capital ~S$250k, strict AML, tech risk controls) to ensure they operate safely.
Prioritizing Retail Safeguards Over Speculation
Retail protection is where Singapore’s framework is most restrictive. MAS does not treat crypto as a consumer product to be promoted. It treats it as a high-risk financial activity.
Retail customers must undergo a risk awareness assessment before trading. Crypto firms are banned from offering incentives such as referral bonuses or trading rewards. Leverage and credit-funded crypto purchases are prohibited, including the use of credit cards.
Advertising rules are tight. Public advertising of crypto services, on public transport, billboards, or mass media, is effectively banned. Marketing is limited to firms’ own websites and controlled channels, and even then, must not trivialise risk. Bitcoin ATMs were removed in early 2022 under this policy.
Custody rules are equally strict. Customer assets must be segregated and held in trust. MAS expects most customer crypto assets to be kept in cold storage. Daily reconciliation is required. Firms cannot co-mingle customer assets with their own.
Crypto lending and staking through intermediaries is banned for retail customers. Institutional and accredited investors may access such services, but only with explicit disclosures and consent. This rule directly reflects lessons from global failures such as Celsius, Voyager, and FTX.
A Dedicated Framework for High-Stability Stablecoins
In August 2023, MAS finalised a dedicated stablecoin regulatory framework, one of the most detailed globally. It applies to single currency stablecoins pegged to the Singapore dollar or G10 currencies and issued in Singapore.
Issuers must maintain 100% reserve backing in low-risk, same-currency assets. Reserves must be segregated, independently audited, and publicly attested each month. Issuers must meet a minimum base capital of S$1 million or 50% of annual operating expenses, whichever is higher.
Redemption at par is mandatory within five business days. Issuers are restricted to stablecoin issuance only and cannot engage in other crypto activities. Only compliant tokens may carry the label “MAS-regulated stablecoin.”
As of the time of writing, the framework is finalised but still moving toward full legislative implementation. Once live, it will effectively separate credible payment-grade stablecoins from everything else.
Regulating the Gateways: MAS’s Approach to DeFi
Pure decentralised finance remains largely outside direct regulation, as there is often no legal entity to supervise. MAS has taken a pragmatic approach. Rather than attempting to regulate protocols, it focuses on intermediaries, access points, and risk exposure.
Through initiatives such as Project Guardian, MAS has tested institutional-grade DeFi use cases involving tokenised bonds and liquidity pools under controlled conditions. The aim is not deregulation, but experimentation within guardrails. Where DeFi interfaces with licensed entities, existing rules apply.
Stability Over Volume: The Intentional Design Choice
Singapore’s crypto framework prioritises stability over volume. Retail speculation is discouraged. Institutional use is welcomed. Compliance costs are high by design.
For the industry, this filters out weaker players while rewarding firms willing to operate like financial institutions. For policymakers, it offers a clear model: crypto can exist inside the system, but not above it or outside it.
Author: Ayanfe Fakunle
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organizations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.
See Also:
MiCA 2025: Europe’s Crypto Winners and Losers | Disruption Banking
What is the GENIUS Act? Banks and Fintechs Rush Towards Stablecoins | Disruption Banking
