The financial landscape in Southeast Asia has taken a pivotal turn with the official implementation of Singapore’s new Payment Services Act (PSA). This landmark legislation marks a transformative moment for the global cryptocurrency industry, as it now allows crypto companies worldwide to apply for operating licenses to legally conduct business within one of Asia’s most advanced financial hubs.
Backed by the authority of the Monetary Authority of Singapore (MAS), the PSA establishes a comprehensive and forward-looking regulatory framework designed to support innovation while ensuring consumer protection, cybersecurity resilience, and compliance with anti-money laundering (AML) and counter-terrorism financing (CFT) standards.
👉 Discover how global crypto firms can now access one of Asia’s most trusted financial markets.
A New Era for Crypto Regulation in Singapore
Effective immediately, the Payment Services Act introduces a licensing regime that specifically addresses digital payment token (DPT) services — a category that includes cryptocurrencies like Bitcoin and Ethereum. This positions Singapore as one of the first jurisdictions in the region to offer a clear, structured path for crypto businesses seeking legitimacy and long-term sustainability.
Under the new law, any company — regardless of origin — that wishes to provide cryptocurrency trading, wallet services, or exchange operations in Singapore must obtain a license from MAS. The regulator will assess applicants based on their financial soundness, governance structure, risk management practices, and compliance protocols.
This move not only enhances regulatory clarity but also strengthens investor confidence. By formalizing oversight over previously gray-market activities, MAS aims to foster a secure and transparent environment where innovation thrives under responsible supervision.
Bridging the Gap with Regional Leaders
Singapore’s initiative brings it closer to Japan, which has long been recognized as Asia’s leading crypto hub. Since 2017, Japan has issued licenses to 22 cryptocurrency exchanges, setting an early benchmark for regulatory rigor. However, Singapore’s new framework offers several competitive advantages.
According to Nizam Ismail, Founder and CEO of Ethikom Consultancy, the PSA stands out for its focus on “emerging and innovative” payment solutions such as e-wallets and crypto trading platforms. Unlike rigid, entity-based models, Singapore’s approach is activity-based and risk-centric, allowing regulators to adapt rules according to the nature and scale of operations.
This flexibility makes the jurisdiction particularly attractive to startups and established players alike who are looking for a balanced regulatory environment — one that supports growth without compromising security.
Industry Leaders Prepare to Apply
Several major players have already signaled their intent to enter the Singaporean market under the new rules. Liquid Group Inc., a Tokyo-based crypto exchange operator, plans to submit its application through its local subsidiary, Quoine Pte. CEO Mike Kayamori welcomed the development, stating:
“We see this as a significant step toward building trust and stability in the digital asset ecosystem.”
Similarly, Luno, a London-based firm with existing operations in Singapore and Malaysia, praised the clarity provided by the PSA. Sherry Goh, General Manager at Luno Singapore, emphasized that regulatory certainty benefits both businesses and consumers:
“It gives users a clear idea of which platforms they can trust — that’s invaluable for mainstream adoption.”
Chainalysis data underscores the growing importance of the Asia-Pacific region in global crypto activity: 20 out of the top 50 exchanges are based in APAC, accounting for nearly 40% of Bitcoin trading volume in the first half of last year.
Strengthening Consumer Protection and Market Integrity
At the heart of the PSA is a commitment to safeguarding users and maintaining financial integrity. MAS will now have expanded powers to monitor cybersecurity threats, enforce strict AML/CFT measures, and ensure that licensed firms maintain adequate capital reserves.
Loo Siew Yee, Assistant Managing Director at MAS, highlighted the strategic vision behind the law:
“This activity-based, risk-focused regulatory framework enables us to apply rules appropriately and remain resilient against evolving business models.”
By focusing on the type of service rather than just the entity providing it, MAS can respond more effectively to innovations such as decentralized finance (DeFi), stablecoins, and cross-border payment solutions.
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Global Implications and Strategic Positioning
With giants like Binance maintaining a presence in Singapore through Vertex Ventures — a subsidiary of state-owned Temasek Holdings — attention is mounting on whether major exchanges will pursue formal licensing. While Binance has not confirmed its intentions, industry analysts suggest that full compliance could enhance its credibility in other regulated markets.
For emerging projects and fintech innovators, Singapore’s open-door policy offers a rare combination: regulatory clarity, access to capital, and proximity to high-growth Asian markets. As more firms line up to apply, the city-state is poised to become a central node in the global digital asset network.
Frequently Asked Questions (FAQ)
Q: Can foreign crypto companies apply for a license in Singapore?
A: Yes. The Payment Services Act allows crypto firms from any country to apply for a license to operate in Singapore, provided they meet MAS requirements for compliance, security, and financial stability.
Q: What types of crypto services require a license?
A: Any business offering digital payment token services — including cryptocurrency exchanges, custodial wallet providers, and money-changing platforms — must obtain a license under the PSA.
Q: How does Singapore’s regulation compare to other countries?
A: Unlike some jurisdictions with restrictive or unclear rules, Singapore adopts a risk-based, technology-neutral approach that supports innovation while enforcing strong consumer protections.
Q: Is consumer funds protected under the new law?
A: While there is no government-backed insurance scheme like traditional banking, licensed operators must adhere to strict capital adequacy, cybersecurity, and AML standards to minimize risks.
Q: What happens if a company operates without a license?
A: Unlicensed operation of regulated payment services is illegal and subject to penalties, including fines and criminal prosecution.
Q: How long does the licensing process take?
A: The timeline varies depending on complexity, but MAS typically takes between 6 to 12 months to review applications thoroughly.
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Conclusion
Singapore’s implementation of the Payment Services Act represents more than just national policy reform — it signals a broader shift toward institutional acceptance of blockchain technology and digital currencies. By creating a transparent, inclusive, and secure regulatory environment, the city-state is positioning itself as a preferred destination for responsible crypto innovation.
As global interest in digital assets continues to rise, Singapore’s model may serve as a blueprint for other nations navigating the complex intersection of technology, finance, and regulation. For crypto entrepreneurs and investors alike, the message is clear: Singapore is open for business — the right way.
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