Tightened Regulatory Scrutiny Reshapes Singapore’s Crypto Landscape
Singapore’s cryptocurrency landscape is experiencing significant shifts as Tokenize Xchange announced its departure on Sunday, following its failure to secure a Major Payment Institution (MPI) licence, which is typically essential for digital token service providers (DTSPs). This exit will result in the layoff of all 15 staff members, despite the company’s prior plans to expand its Singapore office to 100 employees and having raised US$11.5 million in funding. These developments occur amidst stricter regulatory measures introduced by the Monetary Authority of Singapore (MAS). On June 6, MAS mandated that all Singapore-based DTSPs must be licensed by June 30 to continue operations, with the regulator explicitly stating it has set a high bar for licensing due to increased money laundering risks and will generally not issue new licenses. This June update marked the third and final phase of the Financial Services and Markets Act (FSMA), which incorporates provisions from the MAS Act of 1970, including general powers over financial institutions, anti-money laundering (AML), and countering the financing of terrorism (CFT) measures.
Navigating the Complexities of a Rigorous Licensing Framework
Under the Payment Services (PS) Act, DTSPs can secure three types of licenses, with the Major Payment Institution licence being the most coveted but also the most demanding. Coinbase’s Singapore head, Hassan Ahmed, described the MPI licensing process as a comprehensive “menu” where companies select desired services for approval at both licensing and specific service levels. Ahmed noted that while attractive, obtaining the MPI license can be complex and demanding due to extensive compliance requirements, leading many crypto firms to withdraw their applications despite initial interest. Industry players commend Singapore for its rigorous standards and strict enforcement in critical areas like AML, CFT, safeguarding, and consumer protection—especially vital since the 2022 FTX collapse, which underscored the need for clear segregation of corporate and consumer funds. Technology risk management and platform uptime are also key considerations during the MPI license application process, making the entire procedure a highly detailed and non-straightforward endeavor.
Singapore’s Continued Allure Amidst Strict Compliance
Despite the non-straightforward and capital-intensive nature of building an MAS-compliant program, the framework is clear and transparent. Danny Chong, co-chairman of the Digital Assets Association, emphasized MAS’s clear and unambiguous approach, noting the regulator’s extensive engagement with the digital asset industry for feedback. Chong highlighted that the continuous influx of crypto firms establishing operations in Singapore, despite the comprehensive licensing process, testifies to the country’s attractiveness. As of July 2025, MAS has granted digital token payment licenses to 34 institutions, including major players like Coinbase and OKX. A May 2025 report by Artemis Analytics also indicated that Singapore had the world’s second-highest percentage of stablecoin flows between January 2023 and February 2025. Chong suggested that Tokenize’s decision to exit rather than reapply after failing to obtain the MPI licence was likely a business strategy, as reapplication would have required ceasing Singaporean operations due to the strict June 30 deadline. Unlike some other countries, Singapore’s regulator has not imposed a moratorium on new licenses, signaling a clear path forward for well-governed firms.
