Guidelines for Cryptocurrency Regulation in Singapore – Comprehensive Overview for the Year 2025
In 2024, the regulatory landscape for Digital Payment Token (DPT) service providers in Singapore underwent significant changes, primarily driven by amendments to the Payment Services Act (PS Act) and the introduction of stricter compliance requirements.
The Monetary Authority of Singapore (MAS) now oversees all DPT service providers, including crypto exchanges, wallets, and payment services. To operate legally, these providers must obtain a license either as a Standard Payment Institution (SPI) or a Major Payment Institution (MPI), depending on their transaction volumes and business scale.
The SPI license covers providers with monthly transactions up to SGD 3 million (or SGD 6 million if providing multiple payment services, excluding e-money issuance and money-changing), while the MPI license is required for providers exceeding these thresholds, with higher capital and security deposit requirements.
Key regulatory requirements include:
- Consumer Protection: MAS prohibits locally issued credit cards from being used to purchase cryptocurrencies and bans promotional incentives like airdrops aimed at retail investors.
- Transaction Transparency: The "Travel Rule" mandates Virtual Asset Service Providers (VASPs) to share customer originator and beneficiary information for transactions above SGD 1,500 to combat money laundering.
- Asset Segregation: Customer assets must be held in trust, separate from company funds, protecting investors if firms become insolvent.
- AML/CFT Controls: Providers must enforce Know Your Customer (KYC) procedures, transaction monitoring, and suspicious activity reporting.
- Risk Disclosures and Investor Education: Providers are required to inform customers about crypto risks such as volatility and scams and promote financial literacy.
Additionally, by June 30, 2025, Singapore-based crypto firms serving overseas clients need licensing under the Financial Services and Markets Act (FSMA) or must cease those operations.
As of early 2024, MAS had authorized 19 crypto service providers, most holding MPI licenses, reflecting the regulatory rigor applied to the sector. Singapore adopts a cautious stance on direct marketing of cryptocurrencies to retail investors, placing limits on advertising aimed at individuals.
The Travel Rule requires DPT service providers in Singapore to collect and share originator and beneficiary data during DPT transactions, with the scope of information depending on the transaction amount. Providers must also implement Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) procedures and policies, including customer due diligence, transaction monitoring, sanctions screening, suspicious transaction reporting, recordkeeping, and compliance with the Travel Rule.
In September 2024, the MAS revised guidelines to enhance consumer protection measures for DPT service providers. These guidelines include access measures, conflict of interest provisions, and business conduct regulations aimed at safeguarding consumer interests.
Companies in Singapore can choose from three types of licenses depending on their business type: money-changing, SPI, and MPI. The MAS takes into consideration a list of assessment criteria when evaluating an application for licenses, including governance and ownership requirements, fitness and propriety, competency of key individuals, and technology risk management.
The Payment Services Act 2019 (PS Act) establishes a regulatory framework for digital payment token (DPT) service providers in Singapore. The PS Act also requires all providers of cryptocurrency to ensure the public understands the risks of crypto trading and prohibits certain marketing practices.
For transactions exceeding SGD 1,500, additional information such as the originator's residential address, registered or business address, unique identification number, and date and place of birth may be required.
A solution like Sumsub offers a Travel Rule compliance solution that supports 5 protocols and over 1,700 VASPs, providing features for identity verification, transaction monitoring, AML screening, and regulatory reporting.
In conclusion, Singapore's regulatory framework for DPT service providers is designed to balance fostering crypto innovation and safeguarding financial stability and consumers in Singapore's growing digital asset market.
Finance played a crucial role in Singapore's regulatory changes for Digital Payment Token (DPT) service providers in 2024, as the Payment Services Act (PS Act) underwent modifications and stricter compliance measures were introduced. To legally operate, DPT providers must now obtain either a Standard Payment Institution (SPI) or Major Payment Institution (MPI) license, based on their transaction volumes and business scale.
