The Monetary Authority of Singapore (MAS) has clarified its stance on Digital Token Service Providers (DTSPs), quelling industry fears of a complete ban on crypto firms that serve foreign clients. On June 6, MAS announced that from June 30, crypto firms that solely serve customers outside of Singapore, particularly related to digital payment tokens and capital market product tokens, will need to acquire a license.
The regulator cautioned, however, that such licenses would be allocated only in very specific situations. Citing the challenge of monitoring offshore firms and the associated money laundering risks, the MAS stated, “We have set a high threshold for licensing and will typically not grant a license.”
According to the MAS, they are incapable of effectively supervising such entities. As a result, firms that are unable to secure the necessary licenses will have to discontinue their regulated activities.
The crypto market reacted promptly when MAS imposed a June 30 deadline for local crypto service providers to cease providing digital token services to overseas markets. This move has already sparked a shift. For example, WazirX, an Indian-serving crypto exchange based in Singapore, announced its plans to move its operations to Panama shortly after the MAS deadline was revealed.
Singaporean regulators have recently tightened control over the local crypto industry. While crypto companies serving Singaporean customers are already regulated, the new rules expand this oversight to those serving foreign clients. However, the MAS clarified that not all crypto-related services are affected by these changes.
“Providers of services related to other tokens, such as utility and governance tokens, are not subject to licensing or regulation under the new regime, and thus remain unaffected,” the MAS said.
This regulatory change comes after reports in May that digital assets are gaining popularity in Singapore, with a recent survey showing that 94% of respondents are familiar with at least one digital asset.
