Singapore is introducing new stringent regulations for digital token service providers (DTSP), which will take effect from June 30, 2025. The regulations affect all companies and individuals operating with digital tokens.
New Licensing Requirements
Under the updated Financial Services and Markets Act 2022, any company or partnership offering digital token services to clients outside Singapore must obtain a DTSP license from the Monetary Authority of Singapore (MAS). To qualify for the license, applicants must meet strict financial requirements, including maintaining a minimum base capital of SGD 250,000.
Abandonment of Old Rules
The MAS has made it clear that there will be no grace period. Firms that do not secure the required license must immediately cease all cross-border digital token activities. This regulation closes a previous loophole that allowed Singapore-based crypto firms to serve international clients without local licensing.
Market Reaction to Changes
Industry experts see this move as necessary to enhance market integrity and investor protection. However, the abrupt timeline and strict compliance requirements may lead to market consolidation, with smaller players struggling to bear the costs and administrative burden. Many firms may be forced to exit the overseas crypto market or shut down operations entirely.
In summary, Singapore's new crypto regulatory framework signifies a tightening of oversight. Crypto firms based in Singapore must act swiftly to obtain licensing or face substantial fines and potential jail time, highlighting the city-state's commitment to combating financial crime in the digital asset space.
