Singapore Crypto Rules Explained: A Guide for Investors, Startups, and Exchanges

As digital assets evolve, Singapore has emerged as one of the most closely watched jurisdictions for crypto regulation. Known for its fintech-friendly ecosystem, the city-state has recently taken a more cautious and structured approach to overseeing digital asset activities. Whether you're a crypto investor, startup founder, or exchange operator, understanding Singapore’s regulatory environment is crucial. This article provides a comprehensive mid-2025 update on Singapore’s crypto rules, including licensing requirements, stablecoin frameworks, compliance obligations, and how it compares with global peers.

MAS Licensing and Crypto Restrictions

In June 2025, Singapore introduced a new Digital Token Service Provider (DTSP) regime under the Financial Services and Markets Act (FSMA). Effective from 30 June 2025, any Singapore-based firm offering crypto services to clients outside the country must obtain a DTSP license or cease all cross-border token activities. Importantly, the Monetary Authority of Singapore (MAS) has stated it will generally not issue such licenses due to concerns around money laundering and terrorism financing risks. Only firms with exceptional risk controls may qualify.

Failure to comply with this rule may result in criminal penalties, including fines of up to S$250,000 and imprisonment for up to three years. This move effectively restricts most crypto businesses in Singapore from servicing overseas markets without full MAS approval.

Domestically, entities offering crypto services must continue operating under the Payment Services Act (PSA). Introduced in 2020, the PSA requires businesses that deal in digital payment tokens (such as exchanges, wallet providers, and brokers) to hold a license—either as a Standard or Major Payment Institution, depending on transaction volumes and scope of services.

Singapore’s Stablecoin Framework

Singapore has also implemented a comprehensive regulatory regime for single-currency stablecoins (SCS), particularly those pegged to the Singapore Dollar or major G10 currencies and issued within the country.

Key requirements include:

• Licensing: Non-bank stablecoin issuers with more than S$5 million in circulation must apply for a Major Payment Institution (MPI) license under the new “Stablecoin Issuance Service” category. Issuers below this threshold are exempt but cannot market their tokens as “MAS-regulated.”

• Reserve Requirements: All SCS must be fully backed 1:1 by high-quality liquid assets—either cash or short-term government securities (maximum 3-month maturity) in the pegged currency. Daily reserve valuation is required.

• Custody and Audit: Reserve assets must be segregated and held with licensed custodians. Monthly independent attestations and annual financial audits are mandatory.

• Redemption at Par: Issuers must guarantee redemption at face value within five business days upon request.

• Capital Standards: Issuers must maintain base capital of at least S$1 million or 50% of annual operating expenses, along with a liquidity buffer.

• Transparency: A detailed whitepaper outlining the stablecoin’s operations, governance, risks, and redemption mechanisms must be publicly available.

Only stablecoins that meet all of the above conditions can be marketed as MAS-regulated. This clear delineation aims to safeguard consumer trust while preserving the integrity of Singapore’s financial system.

Compliance Obligations for Crypto Firms

Firms licensed under MAS are held to high compliance standards. These include:

• Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) controls, including customer due diligence, transaction monitoring, and implementation of the FATF “travel rule.”

• Technology Risk Management, ensuring proper cybersecurity, data protection, and incident response capabilities.

• Segregation of Client Funds, mandatory recordkeeping, and transparency requirements.

• Operational Solvency, requiring capital adequacy and contingency plans to ensure firms can meet client obligations or exit the market responsibly.

MAS applies these standards rigorously to crypto businesses, treating them similarly to traditional financial institutions in terms of regulatory expectations.

How Singapore Compares Globally

Singapore’s crypto framework stands out for its strict licensing controls and focus on financial stability. Compared to other jurisdictions:

• European Union: The EU’s MiCA (Markets in Crypto-Assets) regulation enables crypto firms to operate across all member states with a single license. While MiCA includes stablecoin rules and transparency mandates similar to Singapore’s, it takes a more integration-focused and business-friendly approach.

• United States: Regulation in the U.S. remains fragmented across agencies like the SEC, CFTC, and FinCEN. However, new federal legislation passed in mid-2025 requires stablecoins to be fully backed and regularly audited, echoing parts of Singapore’s rules. Broader exchange regulations remain a gray area.

• Hong Kong: Hong Kong has adopted a more innovation-forward stance, allowing regulated retail access to crypto and launching a new stablecoin licensing regime. It promotes its jurisdiction as a crypto hub, with licensing paths more accessible than Singapore’s.

In contrast, Singapore positions itself as a quality-over-quantity regulator, aiming to attract only well-capitalized and compliant players. While this may limit rapid crypto expansion, it provides long-term stability and trust in the system.

Conclusion

Singapore’s regulatory approach to crypto in 2025 underscores its commitment to balancing innovation with prudence. The city-state has moved decisively to impose higher standards on exchanges, stablecoin issuers, and token service providers. While this may deter high-risk or speculative operators, it creates a transparent and secure environment for serious investors and entrepreneurs.

For crypto firms looking to enter or remain in Singapore, the message is clear: compliance isn’t optional—it’s foundational. And for investors, Singapore’s rules offer strong consumer protections and market integrity, making it one of the most trusted jurisdictions in the digital asset space.

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Disclaimer: The opinions expressed in this article are for informational purposes only. This article does not constitute an endorsement of any of the products and services discussed or investment, financial, or trading advice. Qualified professionals should be consulted prior to making financial decisions.