Singapore Crypto Regulation and Licensing Framework 2025 Guide

Singapore crypto regulation has turned the city‑state into the go‑to hub for digital‑asset firms that want clear rules without stifling innovation. Since 2020 the regulatory landscape has layered legislation, and the June2025 rollout of the Financial Services and Markets Act (FSMA) finally put every digital token service provider (DTSP) under a single licensing regime. If you’re planning to launch an exchange, a wallet service, or a stablecoin project, you need to know which licence fits your business, what capital you must set aside, and how the anti‑money‑laundering (AML) rules bite.

TL;DR

• MAS (Monetary Authority of Singapore) is the sole regulator for crypto firms.
• Two main licences under the Payment Services Act: Standard (≤SGD3M/mo) and Major (>SGD3M/mo).
• Since 30June2025, every DTSP must hold a licence under FSMA, even if it only serves overseas users.
• AML compliance is driven by the Crypto Travel Rule (MAS NoticePSN02) - full KYC, transaction monitoring and suspicious‑activity reporting.
• Stablecoin issuers need a dedicated licence, meet backing‑and‑redemption standards, and cannot use credit‑cards for purchases.

Who Regulates Crypto in Singapore?

At the heart of the regulatory architecture is Monetary Authority of Singapore (MAS), the country’s central bank and financial‑services watchdog. MAS issues licences, enforces anti‑money‑laundering (AML) standards and monitors systemic risk across all financial sectors, including digital assets.

Key Legislation: PSA and FSMA

The Payment Services Act (PSA) launched in January2020 and created a unified framework for traditional payment providers and crypto‑related services. Under PSA, digital currencies are called Digital Payment Tokens (DPTs) and are treated as legal assets.

In 2025 the Financial Services and Markets Act (FSMA) took over the licensing of digital token service providers. The change means that any firm offering token‑exchange, custody, or issuance services from Singapore - even if its customers are abroad - must apply for a licence under FSMA.

Licensing Tiers and Capital Requirements

MAS categorises crypto firms into three licence classes:

Key points for each class:

• Standard: Ideal for small exchanges, wallet apps, or payment processors handling modest volumes.
• Major: Required for institutional platforms, high‑frequency traders, or any service crossing the SGD3million threshold.
• Exempt: Reserved for niche, low‑risk services such as intra‑company token transfers; still subject to MAS notification.

2025 Regulatory Overhaul for Digital Token Service Providers

On 30June2025 the FSMA‑based regime for Digital Token Service Providers (DTSPs) went live. The key points:

1. All DTSPs operating from Singapore must hold a licence - there is no “soft‑landing” period.
2. Licences are granted only in “exceptional” cases; most applicants must demonstrate robust governance, technology and capital.
3. Unlicensed entities were ordered to cease operations by the deadline and face fines up to 10% of annual turnover.
4. Licensees must appoint a Singapore‑resident compliance officer, conduct annual independent audits and meet heightened cybersecurity standards.

Anti‑Money‑Laundering and the Crypto Travel Rule

MAS enforces AML/CFT through Notice PSN02 (the Crypto Travel Rule). The notice obliges every DPT service provider to:

• Collect full KYC data (name, address, ID, source of funds) before onboarding.
• Monitor transactions in real‑time for structuring, rapid movement of large sums, or links to sanctioned entities.
• Submit Suspicious Transaction Reports (STRs) to the Suspicious Transaction Reporting Office within 24hours of detection.
• Maintain records for at least five years and make them available to MAS on request.

Non‑compliance can trigger licence suspension, heavy fines, or criminal prosecution.

Capital Markets Services (CMS) Licence for Exchanges

Crypto exchanges that facilitate token listings, primary issuance or market‑making must also secure a Capital Markets Services licence under the Securities and Futures Act. Requirements include:

• Minimum paid‑up capital of SGD1million for a full‑service exchange.
• Robust segregation of client assets.
• Fit‑and‑proper assessment of senior management.
• Regular stress‑testing and disclosure of systemic risk metrics to MAS.

Stablecoin Framework and Innovation

Singapore’s stablecoin rules sit alongside the broader crypto regime. The key elements are:

• Issuers must obtain a licence and prove that each token is fully backed by fiat or approved digital assets.
• Redemption rights must be honoured on demand, and the backing portfolio must be audited quarterly.
• Credit‑card purchases of stablecoins are prohibited to curb consumer leverage.
• MAS monitors cross‑border stablecoin flows to ensure compliance with AML standards.

Practical Checklist for Crypto Firms Entering Singapore

1. Identify the correct licence class (Standard, Major, Exempt, DTSP, CMS).
2. Prepare capital - SGD100k minimum for Standard, SGD250k for Major, higher for CMS.
3. Hire a Singapore‑resident compliance officer and set up AML/KYC software that meets PSN02.
4. Draft internal policies for cybersecurity, data protection and business continuity.
5. Submit the licence application via MAS’ online portal, attaching governance, technology and financial statements.
6. Plan for annual independent audits and ongoing reporting (quarterly AML reports, annual CMS returns).
7. If launching a stablecoin, set up a separate escrow account and arrange quarterly third‑party audits.

Following this list reduces the risk of costly delays and helps you hit the market faster.

Frequently Asked Questions

Do I need a licence if I only serve foreign customers from Singapore?

Yes. The 2025 FSMA regime applies extraterritorially - any DTSP operating out of Singapore, even if all users are abroad, must obtain a licence.

What is the difference between a Standard and a Major Payment Institution licence?

The Standard licence caps monthly transaction volume at SGD3million and requires SGD100k capital, while the Major licence covers any volume above that threshold and demands at least SGD250k plus advanced risk‑management controls.

How does the Crypto Travel Rule affect my AML program?

Under NoticePSN02 you must collect full KYC data, monitor every transaction for suspicious patterns, and file STRs within 24hours. Your system needs to log and retain this data for at least five years.

Are stablecoins treated the same as other crypto tokens?

Stablecoins have a separate licensing track. They must be fully backed, undergo quarterly audits, and cannot be purchased with credit cards, whereas other DPTs follow the general PSA/FSMA rules.

What penalties apply for non‑compliance with MAS regulations?

MAS can impose fines up to 10% of annual turnover, suspend or revoke licences, and in severe cases pursue criminal charges against responsible individuals.

Can I operate a crypto exchange without a CMS licence if I only serve retail customers?

No. Any platform that lists tokens for public trading or provides market‑making services must hold a Capital Markets Services licence, regardless of client type.