Singapore Implements Near-Ban on Foreign-Only Digital Token Services
Date Published
Singapore's Monetary Authority (MAS) has announced significant regulatory changes affecting the digital asset ecosystem, specifically targeting foreign-only digital token service providers.
Singapore Tightens Crypto Regulations to Curb Offshore Risks
Starting June 30, crypto firms offering services exclusively outside Singapore must obtain a license, which MAS states it will
generally not issue.
The move aims to strengthen oversight and combat money laundering risks associated with offshore crypto activities.
MAS Sets High Bar for Licensing and Enforces Stricter Oversight
MAS emphasized that licenses will be granted only under
extremely limited circumstances,
citing difficulties in supervising offshore firms and AML/CFT concerns.
“MAS has set the bar high for licensing and will generally not issue a licence,” the regulator said, highlighting the challenges of overseeing such entities.
Consequently, businesses unable to secure licenses will be forced to cease their regulated activities in Singapore.
Impact on International Crypto Services and Industry Shift
The regulation has already prompted a notable exodus from Singapore-based firms serving overseas markets. WazirX, a major India-focused with operations based in Singapore, announced it will relocate to Panama following the new rules.
As one industry expert noted:
The MAS will grant licences under the new framework only in extremely limited circumstances.
Selective Exemptions and Focus on Utility Tokens
Not all crypto-related services are affected; providers of utility and governance tokens remain outside the licensing scope under the new regime.
This indicates a targeted approach by MAS to regulate primarily payment tokens and tokens of capital market products.
Singapore’s move follows increased local awareness of digital assets, with recent surveys showing that 94% of respondents are familiar with at least one digital asset.
Stricter Control Reflects Broader Regional Trends
Recent regulatory actions suggest Singapore aims to maintain tighter control over its crypto industry amid rising adoption and associated risks.
By expanding existing regulations to encompass offshore services, authorities seek to mitigate financial crime and ensure compliance.
As global regulators intensify oversight, regional crypto markets are navigating increased compliance demands that could reshape industry dynamics.
Understanding these developments is crucial for international firms seeking entry or expansion within Singapore’s evolving regulatory landscape.
