MAS Clarifies Digital Token Service Provider Licensing Scope for Offshore Activities

The Monetary Authority of Singapore (MAS) provided clarification on Monday, June 9, 2025, regarding the applicable scope for its Digital Token Service Providers (DTSPs) regime. This clarification was issued in response to feedback received on a consultation paper concerning proposed regulatory approaches for DTSPs under the Financial Services and Markets Act 2022.

A key clarification from MAS states that effective June 30, 2025, DTSPs providing services solely to customers outside of Singapore, specifically related to digital payment tokens and tokens of capital market products, will be required to obtain a license. MAS emphasized that it has set a high bar for such licensing and will generally not issue licenses for these business models. The regulator cited higher money laundering risks associated with such operations and its inability to effectively supervise entities whose substantive regulated activity occurs outside Singapore. Without a license, these DTSPs will be required to cease their regulated activities.

In contrast, providers of services for digital payment tokens or tokens of capital market products that serve customers within Singapore are already subject to existing regulations, and their licensed activities remain unchanged. These providers serving Singaporean customers are also permitted to provide services to customers outside of Singapore. MAS further clarified that providers of services in relation to other token types, such as those used solely as utility and governance tokens, are not subject to licensing or regulation under the new regime.

MAS noted that existing DTSPs serving exclusively non-Singaporean customers will be required to cease this activity when the regime takes effect on June 30, 2025, due to the higher risks involved. The authority stated that its position on this matter has been consistently communicated since early 2022. MAS confirmed it has reached out to a small number of affected providers to clarify this policy and discuss plans for an orderly wind-down of operations. Parties who believe they may be affected by the DTSP regime are advised to contact MAS via its specified email address.