Singapore winds down certain digital token services, issues regulation clarifications

In an update The Monetary Authority of Singapore notes that:

• From 30 June 2025, DTSPs providing services solely to customers outside of Singapore relating to digital payment tokens and tokens of capital market products will need to be licensed. MAS has set the bar high for licensing and will generally not issue a licence. The money laundering risks are higher in such business models and if their substantive regulated activity is outside of Singapore, MAS is unable to effectively supervise such persons.  Without a licence, such DTSPs will have to cease their regulated activities.
• Providers of services for digital payment tokens or tokens of capital market products that serve customers in Singapore are already subject to regulation and there is no change to what the licensed providers can do. Such providers which serve customers in Singapore may also provide services to customers outside of Singapore.
• Providers of services in relation to other tokens, such as those only used as utility and governance tokens, are not subject to licensing or regulation under the new regime, and hence are not impacted.

Crucially, the regulator says there are significant risks in DTSP services specifically targeting customers outside the jurisdiction, and adds that: "Due to the higher risks presented by the specific circumstances set out above, existing DTSPs serving only customers outside of Singapore will be required to cease this activity when the regime comes into effect on 30 June 2025."

"MAS’ position on this has been consistently communicated for a few years since the first response to public consultation issued on 14 February 2022 and in subsequent publications on 4 October 2024 and 30 May 2025. MAS had reached out to persons who, based on information available to us, may be affected by the DTSP regime to clarify this policy position and to discuss their plans for an orderly wind-down of the activity. Based on available information, we are aware of a very small number of such providers."