Singapore New Licensing Rule for Overseas-Facing Digital Token Service Providers
From 30 June, MAS requires Singapore DTSPs serving only overseas clients to obtain a licence or cease operations—no grace period. Discover what businesses must know.
Jul 6, 2025
Shann Ng
Corporate Lawyer
Starting 30 June 2025, the Monetary Authority of Singapore (MAS) will require all Digital Token Service Providers (DTSPs)—including those serving only overseas clients—to hold a valid licence under the Financial Services and Markets Act 2022 (FSMA), or else discontinue operations. This new rule leaves little room for ambiguity and carries significant operational repercussions for local DTSPs targeting non-Singapore customers.
What Triggers Licensing
The rule applies to:
DTSPs based in Singapore (whether incorporated or operating via a physical presence)
Providing digital payment tokens (e.g., Bitcoin, ETH) or tokenised capital-markets products
Serving customers located entirely outside Singapore
Eligible exceptions include DTSPs already regulated under the Payment Services Act (PSA), Securities and Futures Act (SFA), or Financial Advisers Act (FAA)—these continue operating as before.
Why MAS Took This Step
MAS has framed the rule as essential to reduce money-laundering and terrorism-financing risks inherent in cross-border, internet-based crypto services, while safeguarding Singapore’s reputation as a well-regulated hub. Operating without a licence from June 30 is not permitted, and MAS emphasizes this is neither a surprise nor a sudden shift—the framework has been evolving since 2022.
Key Licensing Requirements
Licensed DTSPs must meet these standards:
Robust Anti‑Money Laundering & CFT Controls
Minimum Capital Thresholds (e.g., S$250,000)
Singapore-based Compliance Officer
Annual Audits & Cybersecurity Protocols
Yet, MAS will generally not grant licences, making continued operation unlikely unless exceptional compliance cases are demonstrated.
Immediate Impact & Market Reaction
DTSPs operating without a licence must cease by 30 June or face consequences
Affected firms and employees are already relocating staff or entities to jurisdictions like the UAE and Hong Kong
MAS reports only a small number of DTSPs affected, and the rule is consistent with prior communications
Action Checklist for DTSPs
Use this as a compliance audit guide:
✅ Step | Action Required |
1. | Identify if you serve only overseas clients |
2. | Check if already covered under PSA, SFA, or FAA |
3. | If not, stop operations by 30 June or apply for FSMA licence |
4. | Prepare internal AML/CFT, capital, compliance officer, audits |
5. | Consult legal counsel if you're unsure about licensing scope |
Why It Matters
This rule highlights MAS’s commitment to closing regulatory loopholes, ensuring Singapore’s DTSPs are held to the same standard regardless of customer location. The move also aligns with broader themes at Absolute IP—from AI/platform transparency to global IP compliance for fintech and digital assets.
For the full MAS framework and licensing criteria, see our deep dive in [Licensing and Compliance in Singapore's Token Ecosystem](/blog/licensing-compliance-token-ecosystem).
Need Help?
Malaysia, UAE, or still in Singapore—wherever your DTSP operates, complying with MAS’s rules is crucial:
Unsure if your firm needs an FSMA licence?
Looking to restructure overseas operations?
Need help setting up AML, compliance staffing, or audits?
Absolute IP provides tailored advisory services. Email us at [email protected] to arrange a strategy session.
