On 30 May 2025, the regulator issued its response to feedback received  on the Consultation Paper on Proposed Regulatory Approach, Regulations, Notices and Guidelines for DTSPs under the Financial Services and Markets Act 2022. 

MAS provided clarification on two issues: 

Scope of New Regulation

"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."

Transition period

"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."

The Letter of Intent will facilitate the sharing of information on regulatory frameworks for capital markets and digital assets, sharing of experience in anti-money laundering and counter-terrorism financing, and building of capacity as well as mutual sharing of experiences and frameworks for the regulation and supervision of capital markets and digital assets.

Deadline for comments is 4 November 2024.

Commenting on the announcement, Assistant Managing Director (Policy, Payments & Financial Crime) at MAS Ms Loo Siew Yee said: “The use of Singpass Face Verification will significantly strengthen the process of digital token set up. This is important as the digital token will be used as a factor to approve subsequent transactions. MAS will continue to work closely with banks on measures to protect customers against scams. We urge consumers to maintain vigilance and avoid falling prey to scams by keeping updated on the latest scam tactics, practising good cyber hygiene and making use of Money Lock.”

The authority also announced the successful completion of the first phase of the Global Layer One (GL1) initiative  and plans to develop standards, market practices and governing principles of foundational digital infrastructure for tokenised assets.

Project Rialto is a collaboration of the BIS Innovation Hub Eurosystem and Singapore Centres in partnership with several central banks. It explores a new automatic FX settlement layer solution using wCBDC as a safe settlement asset that could be deployed for interlinked instant payment systems or digital asset systems.