SINGAPORE Law and Practice Contributed by: Tju Liang Chua and Ulanda Oon, Drew & Napier LLC
regulates specific activities involving digital assets, rather than the digital assets themselves. The legal regime focuses on appropriately regulating the under- lying activity rather than the enabling technology (eg, blockchain or DLT). There is therefore no specific sin- gle piece of legislation governing digital assets. Exist- ing laws are instead continually being expanded or clarified to address digital asset-related issues. However, the characteristics of a digital asset, and the rights it confers, determine which regulatory framework applies. For these purposes, the key non- exhaustive categories are CMPs, DPTs and e-money. Regulatory Frameworks The SFA is the main legislation governing the capital markets and financial investments sector in Singa- pore. The MAS has clarified that offers or issuances of digital assets will be regulated under the SFA if they fit the definition of CMPs under the SFA. To support this analysis, the MAS has published the Guide on the Tokenisation of Capital Markets Products, which describes features that may result in a digital asset being considered a CMP under the SFA. Under the SFA, the regulated activities can be broadly summarised as: • dealing in CMPs; • advising on corporate finance; • fund management; • real estate investment trust management; • product financing; • providing credit rating services; and • providing custodial services. Furthermore, a person who operates an organised market will also need to apply for approval as an approved exchange or be recognised as a RMO under the SFA. In relation to the PS Act, companies providing account issuance, domestic money transfers, cross-border money transfers, merchant acquisition, e-money issu- ance or DPT or money-changing services in Singa- pore must, if not exempted, obtain a money-changing, standard payment institution (SPI) or major payment institution (MPI) licence (each, a “Payment Services
Licence”). An entity may be considered to be provid- ing a PS in Singapore if it operates its PS business out of a physical location in Singapore, or if it employs employees located predominantly in Singapore. The definition of DPTs under the PS Act will cover most cryptocurrencies and stablecoins on the market today, and many cryptocurrency projects and exchanges will require a Payment Services Licence. Amendments to the PS Act came into force in 2024. They expanded the existing scope of regulated ser- vices involving DPTs, domestic money transfers and cross-border money transfers. They also expand MAS’s power to impose additional licence conditions and user protection measures on specific DPTSPs. Under the amended PS Act, the activities regulated as DPT services can be broadly summarised as: • dealing in (buying or selling) DPTs; • facilitating the exchange of DPTs where the service provider comes into possession of the monies or DPTs involved; • facilitating the exchange of DPTs where the service provider does not come into possession of the monies or DPTs involved; • facilitating the transmission of DPTs from one account to another; and • custodial services for DPTs. According to the MAS, payment token derivatives that reference DPTs as underlying assets are not currently regulated in Singapore, unless they are offered by an approved exchange under the SFA. That said, the ancillary activities carried out as part of the trade in payment token derivatives will need to be considered as some of these activities could be regulated PSs under the PS Act. To fully align itself with the FATF standards, Singa- pore also introduced the FSMA for the financial sec- tor, which regulates financial services, including DT services. The FSMA was enacted in April 2022, and the relevant sections applicable to DTSPs came into force on 30 June 2025. The remit of the FSMA encompasses the following persons:
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