Singapore is implementing strict measures for crypto firms working with foreign clients, requiring mandatory licensing. This step aims to prevent financial risks.
New Licensing Rules
As of June 30, 2023, the Monetary Authority of Singapore (MAS) has introduced a new framework requiring all digital token service providers (DTSPs), including those working solely with foreign clients, to obtain a license or cease operations. MAS has stated that it has "set the bar high for licensing and will generally not issue a license" for firms servicing only non-Singapore clients due to the higher risks of money laundering associated with these businesses.
Industry Reaction to Changes
The measures have been well-received by analysts who see them as a timely intervention. *"With the new DTSP regime, MAS is reinforcing that financial integrity is a red line,"* noted Chengyi Ong, head of Asia Pacific policy at Chainalysis.
Implications for Crypto Firms
For crypto companies using Singapore as a base to serve clients abroad, this rule change presents significant challenges. They must either obtain a license or shut down their operations. This is not merely a crackdown, but Singapore's attempt to maintain its reputation as a serious player in global finance after recent high-profile collapses.
With the new licensing framework, MAS aims to restore trust in the crypto industry following significant financial losses. How this will affect the market in the future remains to be seen.
