Singapore has long positioned itself as a forward-looking, innovation-friendly financial centre, with a measured approach to regulating digital assets and distributed ledger technologies. Over the last decade, the Monetary Authority of Singapore (“MAS”) has introduced a series of frameworks to license and regulate activities involving cryptocurrencies and other digital payment tokens (“DPTs”).

Recognising the rapid globalisation of the crypto industry and growing concerns around financial stability, investor protection, and illicit finance, the MAS has introduced amendments to its extant regulatory regime (“Amendments”) to refine its regulatory perimeter.

THE AMENDMENTS

On 30 May 2025, MAS formally notified key amendments to the FSMA and related subsidiary legislation, with changes coming into effect from 1 June 2025. These updates are effectuated with the aim to enhance the integrity, transparency, and resilience of Singapore’s crypto ecosystem. The key highlights of the regulatory update are as follows:

Licensing of Overseas Digital Asset Activities

a. Singapore incorporated entities conducting DPT services outside Singapore will now be required to obtain a license. Previously, such entities were subject to AML/CFT obligations but not required to obtain any license. Now, they must obtain a Digital Token Service Provider (DTSP) licence under the FSMA to continue serving overseas clients.

b. This move was driven by concerns that unlicensed overseas operations by Singapore entities could expose the financial system to regulatory arbitrage. The MAS has clarified that entities must:

• Cease overseas operations immediately if unlicensed;
• Apply for a DTSP licence by 30 June 2025;
• Meet capital, governance, cybersecurity, and compliance benchmarks applicable to local operations. 

c. Failure to comply could result in criminal penalties, including fines up to SGD 250,000 and/or imprisonment for up to three years.

Retail Investor Protection Measures

a. To curb speculative trading and protect less sophisticated users, MAS has finalised rules requiring:

• Segregation of customer assets: DPT service providers must hold customer assets in statutory trusts or segregated accounts. This mitigates the risk of asset commingling and misappropriation.
• Ban on retail lending, staking, and leverage: Retail customers are now restricted from accessing credit, derivatives, or staking services involving DPTs.
• No incentives for retail trading: Promotions such as sign-up bonuses, airdrops, or referral rewards are prohibited.
• Risk disclosures and tests: Retail users must complete risk awareness assessments before using DPT services.

Stablecoin Regulatory Regime

a. MAS has introduced a regulatory framework for single-currency stablecoins pegged to the Singapore dollar or G10 currencies. Issuers seeking MAS recognition must:

• Maintain reserve assets in high-quality liquid instruments;
• Offer timely redemption (within five business days);
• Undergo regular audits and publish reserve attestations.

b. This creates a pathway for trustworthy stablecoins to be integrated into Singapore’s digital economy while weeding out poorly collateralised or opaque issuers.

Enhanced AML/CFT Standards and Technology Risk Management

a. The FSMA amendments also require DPT service providers to:

• Maintain a minimum capital base (SGD 250,000);
• Appoint compliance officers in Singapore;
• Undergo annual audits and cyber hygiene assessments;
• Implement the FATF “Travel Rule”, mandating the collection and transmission of originator and beneficiary information for transfers above SGD 1,500.

b. These requirements seek to strengthen regulatory oversight and bring Singapore’s crypto regime in line with global financial standards.

IMPLICATIONS FOR SINGAPORE-BASED CRYPTO PLAYERS OPERATING IN INDIA

Many crypto companies incorporated in Singapore—particularly exchanges, Web3 startups, and cross-border wallet providers—have significant user bases or operational interests in India. The Amendments fundamentally alter the regulatory calculus for such players.

Licensing Burden and Operational Readiness:

Entities targeting Indian users must now either secure a DTSP licence or cease overseas operations. This imposes substantial compliance costs, and some startups may choose to restructure or relocate operations or narrow their geographical footprint if unable to meet these thresholds.

Implications for Cross-Border User Acquisition and Marketing:

With retail promotion rules tightened, crypto players cannot offer incentives to onboard Indian users. Marketing content must be carefully reviewed to avoid contravening either Singapore’s restrictions or Indian advertising norms.

Conflict with Indian Regulatory Landscape:

India’s approach to crypto remains ambiguous, with the RBI maintaining a cautious stance and no comprehensive crypto legislation in place. There are unresolved tax issues (e.g., 1% TDS on crypto transactions), and a proposed framework from the G20 is yet to be implemented domestically.