Following the October 2024 consultation and the recent MAS media release, Singapore has now finalised its regulatory regime for digital token service providers (DTSPs) under the Financial Services and Markets Act 2022, with the new requirements coming into force on 30 June 2025. The regime’s extraterritorial reach, as discussed in the original article, is confirmed and clarified: Singapore corporations and individuals operating from Singapore, even if providing digital token (DT) services solely outside Singapore, will be subject to licensing and compliance obligations.
MAS has taken a notably cautious approach, citing the heightened money laundering and terrorism financing risks associated with cross-border, internet-based DT services. As a result, MAS will grant DTSP licences only in “extremely limited circumstances”. Applicants must demonstrate a business model with valid reasons for not serving Singapore customers, robust compliance with international standards, and a structure that does not raise regulatory concerns.
Importantly, MAS has confirmed there will be no transitional period. All in-scope DTSPs must suspend or cease operations by 30 June 2025 unless licensed. The four-week notification period before commencement is intended to give final notice, not to serve as a grace period for continued business.
The finalised framework also imposes significant ongoing obligations, including a minimum base capital of S$250,000, mandatory appointment of a compliance officer based in Singapore, annual audits, and strict anti money-laundering/terrorism financing, technology risk, and cyber hygiene requirements. MAS has maintained a fixed annual licence fee of S$10,000, regardless of business size.
This regime cements Singapore’s position as a leader in digital asset regulation, but the high bar for licensing and the absence of transitional relief signal a clear intent: Only the most robust, internationally compliant DTSPs will be permitted to operate from Singapore, even if their business is entirely offshore.
Reed Smith LLP is licensed to operate as a foreign law practice in Singapore under the name and style Reed Smith Pte Ltd (hereafter collectively, "Reed Smith"). Where advice on Singapore law is required, we will refer the matter to and work with Reed Smith's Formal Law Alliance partner in Singapore, Resource Law LLC, where necessary.
Client Alert 2025-155
