Singapore is recognised as one of the world’s most progressive regulators of digital assets. The Monetary Authority of Singapore (MAS) has introduced a comprehensive framework that balances innovation with investor protection and financial stability.
For expatriates and businesses engaged in crypto, understanding this framework is essential. This article explains MAS guidelines on AML/KYC, stablecoins, and digital payment token (DPT) services.
1. Safeguarding Customer Assets
A central feature of the MAS framework is asset protection. Licensed firms must:
- Segregate customer assets in trust accounts.
- Store 90% of assets in offline cold wallets.
- Reconcile accounts daily.
- Keep custody functions independent from trading.
These rules were finalised in 2023 and embedded in the Payment Services (Amendment) Act 2021 and updated Payment Services Regulations.
2. AML and KYC Requirements
Under the Payment Services Act 2019 and MAS Notices:
- Firms must conduct Customer Due Diligence from the first dollar of DPT transactions.
- Enhanced checks apply to higher-risk clients.
- Ongoing monitoring and reporting are mandatory.
- The Travel Rule requires disclosure of payer/payee details in crypto transfers.
These measures align with global FATF standards, combating money laundering and terrorist financing.
3. Stablecoin Framework
MAS introduced a new regulatory regime for single-currency stablecoins (SCS) pegged to SGD or G10 currencies.
Key Rules:
- 100% backing by high-quality, liquid assets.
- Redemption within 5 business days at par value.
- Public disclosure of reserve audit results.
- Capital and operational requirements for issuers.
Compliant stablecoins can be marketed as “MAS-regulated stablecoins,” enhancing trust and market confidence.
4. Marketing Guidelines for DPTs
To prevent trivialising risks:
- Advertising in public spaces and mass media is banned.
- Social media influencers cannot promote DPTs.
- Firms may only use their official websites, apps, or channels.
Conclusion
MAS’s framework ensures that Singapore remains a safe yet innovative hub for digital assets. Expatriates and businesses operating in crypto must prioritise compliance, asset protection, and AML standards. Advomi’s panel of FinTech lawyers advises clients on licensing, regulatory analysis, and compliance frameworks tailored to Singapore law.
