TRW & Co · Corporate, Capital & Tax
Digital Payment Tokens in Singapore
Digital payment tokens in Singapore, from bitcoin to most stablecoins, are regulated under the Payment Services Act 2019 when businesses deal in, exchange, transfer or hold them. MAS now requires assets on trust, limits on retail products, strict AML/CFT and, for overseas-only services, an FSMA licence it rarely grants. This guide sets out the rules, the 2026 stablecoin proposals and the path to a licence.
Key pointSince 4 April 2024, custody and transfer of tokens are regulated DPT services in their own right, so wallet and custody businesses that once sat outside the PS Act now need an MAS licence.
At a glance
Custody now regulated
From 4 April 2024 the DPT service covers arranging transfers and safeguarding tokens where the provider has control, bringing custodians and transfer services into scope.
Assets held on trust
Since 4 October 2024, DPT service providers must segregate customers' tokens and hold them on trust, with proper records and protective controls.
Retail limits from 2025
PS-G03 measures effective 19 June 2025 cover retail risk awareness assessments and restrict incentives, credit and leverage for retail customers.
FSMA Part 9 in force
From 30 June 2025, Singapore entities serving only overseas customers with token services need a licence that MAS says it will grant only rarely.
Stablecoin bill consulted
MAS published draft PS Act amendments on 1 September 2026 to legislate its stablecoin framework, with consultation closing on 16 October 2026.
Swipe or scroll →
What regulation of digital payment tokens in Singapore covers
Digital payment tokens in Singapore are cryptocurrencies and similar tokens intended as a general medium of exchange, such as bitcoin, ether and most stablecoins. Dealing in them, running an exchange, facilitating transfers or holding them for customers is a regulated payment service under the Payment Services Act 2019 (PS Act). Tokens that look like shares, bonds or fund units are regulated separately, as capital markets products.
The rules affect exchanges, brokers, custodians, wallet providers, OTC desks and payment firms that let merchants accept crypto. They also matter to token issuers, fund managers, banks building digital asset services and any Singapore company with staff working on token projects for overseas users.
Singapore's approach has tightened steadily since the PS Act took effect in 2020. MAS now expects licensed digital payment token service providers to meet bank-like standards on AML/CFT and technology risk, to segregate customer assets on trust, and to limit what they offer retail customers. Singapore entities serving only overseas customers have, since 30 June 2025, needed a licence that MAS says it will grant only in extremely limited circumstances.
The legal framework
Three statutes do most of the work. The Payment Services Act 2019 regulates DPT services. The Securities and Futures Act 2001 regulates tokens that are capital markets products. The Financial Services and Markets Act 2022 (FSMA) regulates Singapore-based digital token service providers that serve customers outside Singapore.
What counts as a DPT service
The DPT service originally covered dealing in tokens and facilitating their exchange. From 4 April 2024, MAS expanded it to include accepting or arranging transfers of tokens between accounts, and safeguarding tokens or token instruments where the provider has control over them, together with carrying out customer instructions on tokens in custody. Custodians and transfer services that previously sat outside scope now need a licence. Providers above the PS Act volume thresholds need a Major Payment Institution licence.
MAS notices and guidelines
MAS Notice PSN02 sets AML/CFT requirements for DPT services, including customer due diligence, ongoing monitoring and the requirement to send and receive originator and beneficiary information with token transfers, often called the travel rule. MAS's guidelines on the provision of DPT services to the public restrict marketing, including in public areas of Singapore. MAS's PS-G03 Guidelines on Consumer Protection Measures set expectations on retail access, conflicts of interest, listing and complaints. Technology risk requirements that apply to other financial institutions extend to DPT service providers.
| Token type | Typical features | Regulatory treatment |
|---|---|---|
| Digital payment token | Not denominated in fiat, intended as a medium of exchange, transferable electronically | PS Act DPT service; MPI or SPI licence for service providers |
| Single-currency stablecoin issued in Singapore | Pegged to one currency, backed by reserves | MAS stablecoin framework, with legislation under consultation in 2026 |
| Security or fund token | Rights like shares, debentures or units in a collective investment scheme | SFA prospectus and licensing rules; capital markets services licence |
| Utility or governance token | Access to a product or voting rights only | May fall outside the PS Act and SFA, but analysis is fact-specific |
| Non-fungible token | Unique item such as art or a membership | Generally not a DPT, unless used as a medium of exchange or fractionalised into investment interests |
Classification is not a labelling exercise. MAS looks at the rights and functions a token actually carries, so a "utility" token that offers profit-sharing or redemption rights may be a capital markets product. Our page on securities and capital markets explains the SFA side.
Tax and accounting points
Tax treatment of digital payment tokens in Singapore follows function. Since 1 January 2020, the supply of digital payment tokens has been exempt from GST, and using them to pay for goods or services is not treated as a separate supply of the tokens. Income tax depends on whether gains are capital or trading in nature, which turns on the holder's intentions, frequency of transactions and business model. Exchanges, market makers and treasury functions should confirm their position with tax advisers and keep transaction records that support it. Our GST page covers the wider rules.
Retail customer protections
MAS has said repeatedly that trading in digital payment tokens is highly risky and not suitable for most retail investors. Rather than ban retail access, it has layered protections that licensed providers must build into their products. Many took effect between October 2024 and June 2025.
Segregation on trust
From 4 October 2024, customers' tokens must be segregated from the provider's own assets and held on trust for customers, with proper books, records and controls protecting their integrity and security.
No retail lending or staking
MAS's measures prohibit providers from lending or staking retail customers' tokens. Yield products aimed at retail users need careful review against this restriction.
Risk awareness assessment
Under PS-G03, from 19 June 2025 providers should assess whether each retail customer has sufficient awareness of DPT risks before providing services.
Limits on incentives and credit
PS-G03 restricts incentives such as sign-up rewards, and credit or leverage facilities, for retail customers. Card-funded purchases and margin features need review.
Listing and conflicts
Providers should publish policies on how tokens are listed and delisted and manage conflicts from vertically integrated trading activities and their own tokens.
Marketing limits
MAS guidelines restrict promotion of DPT services to the public, including advertising in public areas and through third-party influencers. Communications must not trivialise risk.
Singapore permits retail access to crypto, but only through providers that can prove customers understand the risk and that their tokens are held on trust.
Stablecoins: the 2023 framework and the 2026 bill
In August 2023 MAS finalised its stablecoin framework for single-currency stablecoins pegged to the Singapore dollar or a G10 currency and issued in Singapore. Its core features are reserve assets of at least the par value of tokens in circulation, held in segregated accounts and subject to audit and attestation; redemption at par within a prescribed period; prudential requirements; and disclosure in a white paper. Only qualifying issuers may describe their tokens as "MAS-regulated stablecoins".
On 1 September 2026 MAS published draft amendments to the PS Act to put the framework into law, with consultation closing on 16 October 2026. The proposals, as reported, include a standalone stablecoin issuance licence, a requirement for banks to issue through a separate licensed entity, a ban on paying interest to holders, powers to recognise selected foreign stablecoins and to designate systemic ones, and safeguards on how DPT providers present unregulated stablecoins to retail customers. These are proposals, not law, and subsidiary legislation will follow. Our guide to stablecoin developments tracks the changes.
What prospective issuers should do now
Issuers planning a Singapore dollar or G10 stablecoin should not wait for the final legislation. Reserve management, custody of reserves, redemption operations, audit and attestation arrangements, and the white paper all take months to build. Model the economics on the assumption that interest cannot be passed to holders, and decide early whether a bank group will issue through a separate entity. Platforms listing third-party stablecoins should prepare to distinguish MAS-regulated stablecoins from others in their retail communications. The rules on stablecoins are likely to be the most significant change to digital payment tokens in Singapore since the 2024 scope expansion.
Serving overseas customers from Singapore
Part 9 of FSMA took effect on 30 June 2025. It requires Singapore-incorporated entities, and individuals or partnerships with a Singapore place of business, that provide digital token services only to customers outside Singapore to be licensed. It covers both digital payment tokens and tokens that are capital markets products. Firms already licensed or exempt under the PS Act, SFA or Financial Advisers Act are carved out.
MAS has stated that it will generally not grant these licences and will do so only in extremely limited circumstances, so affected businesses were expected to cease or restructure. MAS has also indicated that Singapore residents employed by foreign companies, performing token services outside Singapore as part of that employment, should not by that alone trigger FSMA licensing. Groups with Singapore staff should map exactly who does what, and for whom. That map should cover directors, executives, compliance officers, engineers with access to production wallets and anyone who negotiates with customers, because each role can point to a different conclusion on where the service is really provided.
Restructuring options for affected groups
Groups caught by Part 9 have broadly three options. They can move customer-facing token services and the staff who perform them to an entity outside Singapore, keeping only non-regulated functions such as research or engineering support in Singapore. They can bring Singapore customers into scope and apply for a PS Act or SFA licence, which takes them out of Part 9. Or they can cease token services altogether. Each option has employment, tax, data and contractual consequences, and the choice should be documented with reasons in case MAS asks how the group handled digital payment tokens in Singapore after June 2025.
The licensing path for DPT service providers
Applying for a licence to provide services in digital payment tokens in Singapore is a substantial project. MAS treats DPT applications as among the most demanding it handles. Its service commitment is to process MPI applications that include DPT services within six months of assigning an officer, compared with four months for other payment services. Many applicants receive an in-principle approval first, with conditions to satisfy before the full licence is granted. Our page on fintech licensing covers admission criteria and licence conditions in detail.
- Classify the tokens and services. Confirm which tokens are DPTs and which may be capital markets products, and which DPT services you provide, including custody and transfers.
- Design custody and segregation. Decide on in-house or third-party custody, wallet architecture, key management and how customer assets will be held on trust.
- Build AML/CFT for tokens. Prepare a risk assessment covering on-chain risks, blockchain analytics, travel rule compliance and unhosted wallet transfers.
- Retail controls. Implement risk awareness assessments, incentive and credit restrictions, listing policies and complaints handling for retail customers.
- Technology and cyber risk. Document security architecture, penetration testing, incident response and business continuity, including for custody systems.
- Submit and engage. File the application and respond promptly to MAS questions, which typically probe custody, AML and governance in depth.
- Satisfy conditions and launch. Meet any in-principle approval conditions, lodge the security deposit, and complete pre-launch independent reviews where required.
Documents and evidence
- Token classification memo for every token listed or handled.
- Custody architecture, key management procedures and trust documentation.
- AML/CFT risk assessment, travel rule solution and blockchain analytics procedures.
- Retail risk awareness assessment content and onboarding flows.
- Listing and delisting policy, conflicts of interest policy and market conduct surveillance.
- Technology risk framework and recent security testing results.
- Customer terms, risk disclosures and marketing approval records.
- Group structure, controllers, directors and evidence of fitness and propriety.
MAS reviewers focus on custody and AML before anything else. An application that explains in plain terms how private keys are generated, stored and used, who can move customer assets, and how suspicious on-chain activity is detected will progress faster than one that relies on vendor brochures.
Risks and common mistakes
Misclassifying a token
Treating a token as a digital payment token when it is in substance a security, or calling it a utility token when it offers investment returns, can expose an issuer or platform to unlicensed activity and prospectus breaches under the SFA. Classification depends on rights, features and how the token is marketed. Analyse each token before listing or issuance, record the reasoning, and revisit it if tokenomics or rights change, for example after a governance vote.
Retail yield products after the staking ban
Earn, savings and staking products that lend or stake retail customers' tokens conflict with MAS's measures for retail customers. Restructuring to serve only accredited or institutional investors is possible but needs proper verification and separate product flows. Review all yield features, including those offered through partners, and document why each is permitted.
Travel rule gaps
PSN02 requires originator and beneficiary information to travel with token transfers between providers, and checks on transfers to and from unhosted wallets. Gaps commonly arise with counterparties in jurisdictions that have not implemented the rule. A provider needs a documented approach for those cases, including when to reject or hold a transfer. Our guide to anti-money laundering sets out the wider framework.
Singapore staff for an offshore exchange
Groups that book customers offshore but employ engineers, compliance staff or executives in Singapore need to check FSMA Part 9 and the PS Act carefully. MAS's clarification on employees of foreign companies is narrow. Where a Singapore entity contracts with customers or carries out token services, licensing risk follows. Map roles and contracts, and restructure before regulators ask.
Marketing that breaches MAS guidelines
MAS's guidelines on DPT services restrict advertising to the public, including through public-area advertisements, social media influencers and third-party sites. Promotions such as referral bonuses also engage PS-G03's incentive restrictions for retail customers. Review campaigns centrally and keep evidence of compliance review for each one.
The cross-border angle
Digital payment tokens in Singapore move across borders by design, so every provider faces conflicting regimes. Bangladesh Bank has repeatedly cautioned the public against virtual currency dealings, and they are not an authorised channel under Bangladesh's foreign exchange rules, so Singapore providers should not treat Bangladesh-resident customers as an ordinary market. The UK has its own cryptoasset regime under the Financial Conduct Authority, and the UAE has dedicated virtual asset regulators in Dubai and Abu Dhabi. Mainland China prohibits crypto trading services, while Hong Kong licenses virtual asset platforms and granted its first stablecoin issuer licences in 2026.
A Singapore licence does not authorise services elsewhere. Providers need jurisdiction-by-jurisdiction analysis of where they market, onboard customers and hold assets, and geo-blocking that works. We coordinate counsel across TRW & Co's network, and where Singapore court or tribunal representation is required, for example in asset recovery after a hack or insolvency, we work alongside Singapore-qualified counsel. Our digital assets page covers ownership, succession and disputes over tokens.
How TRW & Co helps with digital payment tokens in Singapore
Token classification
We analyse tokens against the PS Act and SFA, and advise issuers and platforms on structuring rights and disclosures to fit the intended regime.
Licensing and restructuring
We prepare the regulatory components of MPI applications with DPT services and advise groups on restructuring in light of FSMA Part 9.
Compliance build
We draft custody and trust documentation, PSN02 AML/CFT frameworks, retail risk awareness processes and listing and conflicts policies.
Stablecoin readiness
We map issuer plans against the 2023 framework and the 2026 draft legislation, and help clients respond to consultations and prepare for licensing.
Related work sits across payment services and fintech regulation. See our practices, or contact us to discuss a token project.
Checklist for decision-makers
- Have we classified every token we issue, list, hold or transfer, with written reasons?
- Do our services include custody or transfers brought into scope from April 2024?
- Are customer tokens segregated and held on trust, with reconciled records?
- Have we removed lending and staking of retail customers' tokens?
- Are risk awareness assessments, incentive limits and credit restrictions live for retail users?
- Does our travel rule solution cover counterparties in non-implementing jurisdictions?
- Have we checked FSMA Part 9 for any Singapore entity or staff serving overseas customers?
- Are we tracking the 2026 stablecoin legislation and its effect on the tokens we support?
Businesses that can answer yes are well placed to operate with digital payment tokens in Singapore and to engage MAS with credibility.
Frequently asked questions
01Is it legal to trade crypto in Singapore?
Yes. Individuals may buy, sell and hold digital payment tokens, and businesses may provide DPT services if they hold the appropriate MAS licence or exemption. MAS warns that trading is highly risky and has imposed protections on licensed providers serving retail customers, including segregation on trust, restrictions on incentives and credit, and a prohibition on lending or staking retail customers' tokens. Use providers that appear in MAS's Financial Institutions Directory.
02Do custody-only businesses need a licence?
Generally yes, since 4 April 2024. The DPT service now includes safeguarding tokens or token instruments where the provider has control over them, and carrying out customer instructions on those tokens. Businesses that only hold tokens for customers, without dealing or exchanging, therefore need to consider the PS Act. Transitional arrangements applied to those already operating at the time; new entrants need to apply before starting.
03Is a stablecoin a digital payment token?
Under current law most stablecoins are treated as digital payment tokens. MAS's 2023 framework creates a separate, higher standard for single-currency stablecoins pegged to the Singapore dollar or a G10 currency and issued in Singapore, with reserve, redemption and disclosure requirements. Draft PS Act amendments published in September 2026 would put this framework into law with a standalone issuance licence. Check the legislation's progress before launching or listing a stablecoin.
04Can we offer staking to Singapore retail customers?
MAS's measures prohibit DPT service providers from lending or staking the tokens of retail customers. Staking services aimed at accredited or institutional investors may be possible with proper customer verification and separate product flows. Self-directed staking, where customers stake from their own wallets without the provider's control, raises different questions. Any yield product needs a specific analysis before launch.
05Does FSMA Part 9 affect our Singapore development team?
Possibly. Part 9 applies to Singapore entities and to individuals or partnerships with a Singapore place of business that provide token services only to overseas customers. MAS has said Singapore residents employed by foreign companies and performing services outside Singapore as part of that employment should not trigger licensing by that fact alone. Where a Singapore entity contracts with customers or performs token services, licensing risk arises. Map entities, contracts and roles carefully.
06How long does MAS take to process a DPT licence application?
MAS's service commitment is within six months for MPI applications that include DPT services, measured from when an officer is assigned. In practice, the review is thorough and many applicants first receive an in-principle approval with conditions to meet before the licence is granted. Well-prepared custody, AML/CFT and technology risk documentation is the main factor within the applicant's control.
07What is the travel rule in Singapore?
MAS Notice PSN02 requires DPT service providers to obtain, hold and transmit originator and beneficiary information with token transfers to or from other providers, implementing the FATF standard. It also requires risk-based checks on transfers involving unhosted wallets. Providers need a technical solution, a policy for counterparties in jurisdictions that have not implemented the rule, and monitoring to detect gaps.
Sources and official materials
- Payment Services Act 2019 — DPT service licensing
- MAS: PS-G03 Guidelines on Consumer Protection Measures by DPT Service Providers — Retail access, conflicts, listing and complaints
- MAS: Expanded scope of regulated payment services (2024) — Custody and transfer services brought into scope
- MAS: Regulatory regime for digital token service providers (2025) — FSMA Part 9 position
- MAS: Stablecoin regulatory framework (2023) — Single-currency stablecoin requirements
- MAS: Major Payment Institution licence — Licence requirements for DPT providers
- Financial Services and Markets Act 2022 — Part 9 digital token service providers
General information only, current as at 20 October 2026. It is not legal advice and does not create a lawyer–client relationship. Singapore law and regulatory practice change; check current official sources and take advice on the facts of your matter.