Singapore has long been recognized as a global financial hub, and its approach to cryptocurrency regulation reflects a balance between innovation and risk management. For investors, understanding the regulatory landscape is essential to navigating the digital asset space safely. This guide breaks down Singapore’s cryptocurrency licensing framework, key regulations, and what they mean for users and service providers.
Are Cryptocurrencies Legal Tender in Singapore?
The Monetary Authority of Singapore (MAS) does not recognize cryptocurrencies as legal tender. This means digital assets like Bitcoin or Ethereum cannot be used as official payment methods in Singapore. Furthermore, most crypto transactions remain unregulated—except for specific derivatives traded on approved exchanges.
While this openness encourages innovation, it also exposes investors to significant risks. Unlike traditional financial products, cryptocurrencies are not protected by consumer safeguards, and MAS does not intervene in disputes involving lost or stolen assets.
Key Risks of Trading Cryptocurrencies and Derivatives
Investing in digital assets carries inherent volatility and security concerns. According to official advisories, here are the primary risks:
- No regulatory protection: There are no MAS-backed mechanisms to recover lost funds or digital tokens.
- Unregulated platforms: Most crypto services operate without consumer protection mandates, even if licensed.
- Insolvency risk: If a service provider goes bankrupt, users may lose all deposited assets.
- Hacking and fraud: Digital wallets and exchanges are frequent targets for cyberattacks.
- Sharp price swings: Cryptocurrencies lack intrinsic value, making them highly speculative.
Retail investors should be especially cautious—these products are not suitable for risk-averse individuals.
👉 Discover how regulated crypto platforms can help mitigate investment risks.
Major Regulatory Frameworks in Singapore
Financial Services and Markets Act (FSMA) – Enacted April 2022
Passed on April 5, 2022, the Financial Services and Markets Bill strengthened MAS’s authority over financial institutions, including digital asset firms. Key provisions include:
- Empowering MAS to bar unfit individuals from key roles in payments and risk management.
- Increasing penalties for service disruptions to SGD 1 million (~USD 738,000).
- Requiring virtual asset service providers (VASPs) to obtain licenses—even if they serve overseas clients.
This expansion addresses reputational risks tied to Singapore-based firms offering crypto services abroad. As MAS board member Alvin Tan stated, the law aims to mitigate risks by imposing anti-money laundering (AML) and countering the financing of terrorism (CFT) requirements on all relevant entities.
Payment Services Act (PSA) – Effective January 2019
The Payment Services Act provides a flexible regulatory framework for payment systems and fintech innovation. It targets four core risks:
- Money laundering and terrorism financing
- Consumer fund protection
- Interoperability of payment systems
- Technological and cybersecurity threats
Under the PSA, businesses offering digital payment token (DPT) services must obtain licensing. Notably:
- Major Payment Institutions must cap e-money in personal accounts at **S$5,000 annually** (or S$30,000 under certain conditions).
- E-wallets are prohibited from offering local cash withdrawals.
The Travel Rule: A Global AML Standard
Aligned with FATF (Financial Action Task Force) guidelines introduced in 2019, Singapore enforces the Travel Rule under Notice PSN02 of the PSA.
This rule mandates that VASPs—such as exchanges—must share identifying information (name, address, account details) when transferring digital assets worth more than USD/EUR 1,000 between platforms. The data must be transmitted securely and immediately.
Importantly, the rule applies only to institutions, not individual peer-to-peer transactions.
Stablecoin Regulatory Framework – August 2023
In a significant development, MAS finalized its Stablecoin Regulatory Framework on August 15, 2023. This targets single-currency stablecoins pegged to the Singapore dollar or G10 currencies (e.g., USD, EUR).
To be regulated, issuers must:
- Maintain a minimum base capital of S$1 million (~USD 740,000).
- Hold sufficient reserves to ensure value stability.
- Allow redemptions within five business days of request.
This framework enhances trust in stablecoins by ensuring transparency and financial resilience.
Licensing Landscape: Who’s Regulated?
MAS has received 196 DPT license applications as of May 2022. Of these:
- 74 were withdrawn
- 3 rejected
- 108 pending review
Licensing under the PSA focuses on AML/CFT compliance and technology risk, not consumer fund protection. Firms are not required to maintain capital buffers against insolvency—meaning users may lose funds if a provider fails.
Fully Licensed Entities (as of 2024)
These companies have obtained full approval under the PSA:
- BHEX.SG – Standard Payment Institution license (Aug 2022)
- BitGo – Major Payments License (Aug 2024)
- Coinbase – Licensed October 2023
- Coinhako – Licensed May 2022
- DBS Vickers Securities – Licensed October 2021
- Digital Treasures Center (DTC) – MPI license holder (Aug 2022)
- Fomo Pay – First licensed crypto firm (Sep 2021)
- Independent Reserve SG – First crypto exchange licensed by MAS (Oct 2021)
- MetaComp – MPI license for cloud-based exchange (Dec 2022)
- Paxos – Major Payments Institution license (Nov 2022)
- Revolut Technologies Singapore – MPI license (Aug 2022)
- Sparrow Tech – MPI license (Aug 2022), later acquired by Amber Group
- Sygnum Singapore – Licensed October 2023
- Triple A Technologies – First crypto payment company licensed (Nov 2021)
- Upbit Singapore – Licensed January 2024
In-Principle Approval (IPA) Holders
Companies with IPA can operate temporarily while finalizing compliance:
- Gemini – IPA granted October 2024
- Ripple (XRP) – IPA June 2023; plans to expand cross-border XRP transfers
- Blockchain.com – IPA October 2022
- Circle – IPA November 2022; issuer of USDC and EUROC
- Crypto.com – IPA June 2022
- Genesis – IPA June 2022; later withdrew application and halted operations in August 2022
- Luno Singapore – IPA April 2022; already regulated in Malaysia and Indonesia
👉 See how top-tier platforms maintain compliance while offering global access.
License Exemptions Under Transitional Arrangements
Many firms operate under temporary exemptions if they were active before January 28, 2020. These include:
- Bitstamp
- Cake DeFi
- Coinbase
- Coinhako
- Crypto.com App & Exchange
- Gemini
- Luno
- Tokenize Xchange
This exemption lasts only until the license application is resolved.
Entities No Longer Exempt or Suspended
MAS actively monitors compliance. Some notable changes:
- Removed from exemption list: Bitget, Kraken
Suspended from serving Singapore users:
- Bitget (Dec 2021) – Over dispute involving Korean band BTS
- Binance (Sep 2021) – Ordered to stop services for residents
These actions underscore MAS’s commitment to enforcing rules and protecting consumers.
Frequently Asked Questions (FAQ)
Is it legal to buy cryptocurrency in Singapore?
Yes, buying and holding cryptocurrencies is legal. However, they are not recognized as legal tender, and most transactions occur on unregulated or partially regulated platforms.
Does MAS protect my crypto investments?
No. MAS does not provide insurance or recovery mechanisms for lost or stolen digital assets. Investor protection is limited to AML/CFT oversight—not financial safeguards.
What’s the difference between full license and in-principle approval?
A full license means the firm meets all regulatory requirements. In-principle approval allows temporary operation while final checks are completed.
Why did Genesis halt operations in Singapore?
Genesis withdrew its license application in August 2022 and suspended withdrawals due to strategic and regulatory challenges, highlighting the volatility in the crypto lending space.
Can unlicensed platforms operate in Singapore?
Only those with exemption status can operate during the transitional period. All others must apply for licensing or cease operations.
How does the Travel Rule affect me as a user?
If you transfer over USD 1,000 between exchanges, your personal details will be shared between platforms. This doesn’t apply to wallet-to-wallet transfers outside VASPs.
👉 Stay ahead with platforms that comply with global regulatory standards.
Final Thoughts
Singapore’s crypto regulatory framework prioritizes financial integrity over investor protection. While licensing brings legitimacy, it doesn’t guarantee safety. Users must conduct due diligence and understand that their funds are not insured.
As MAS continues refining rules—especially around stablecoins and cross-border transactions—the ecosystem will likely become more transparent. For now, choosing a licensed or IPA-approved provider is a critical first step toward safer participation.
Whether you're a retail investor or institutional player, staying informed about licensing status, regulatory obligations, and platform credibility is key to navigating Singapore’s dynamic crypto landscape.