Digital token service providers to mainly serve Singapore-based customers: MAS

[SINGAPORE] Digital token service providers (DTSP) will not be able to serve only overseas customers, said the Monetary Authority of Singapore (MAS) on Friday (Jun 6).

The regulator has clarified the scope of the new DTSP regulations, saying that the risks of money laundering are higher in such business models if most of their customers are outside the Republic. MAS noted that it is unable to effectively supervise operations with a substantive overseas customer base.

As part of the regulations, DTSPs will need to be licensed from Jun 30, 2025, if they provide digital payment tokens and tokens of capital market products.

“MAS has set the bar high for licensing and will generally not issue a licence,” said the regulator.

However, DTSPs that serve customers in Singapore are already subject to regulation and may serve customers outside the city-state.

Generally, those that serve Singapore customers would have got a digital payment token licence and a major payment institution licence, both of which are issued by MAS.

DTSPs that serve only customers outside of Singapore will be required to cease activities in the Republic when the regulation comes into effect on Jun 30, 2025.

The regulator’s position has been communicated since its first response to public consultation, which was issued on Feb 14, 2022, as well as in subsequent responses on Oct 4, 2024, and May 30, 2025. MAS said that it is aware of a “very small number” of providers that fit this profile.

“MAS had reached out to persons who, based on information available to us, may be affected by the DTSP regime to clarify this policy position and to discuss their plans for an orderly wind-down of the activity.”