The MAS Guidelines on Licensing for Digital Token Service Providers under the Financial Services and Markets Act 2022 (FSM Act) lay out a clear and rigorous process for any company in Singapore (or incorporated there) that provides digital token services outside of Singapore. Here are some key points you should know:

🔑 Who this applies to

• Entities incorporated in Singapore or operating from Singapore.
• Providing digital token services outside Singapore.
• This includes exchanges, custodial wallets, token issuance, and more (as defined in the FSM Act).

📋 Who needs a licence

A licence is required to provide any of the 10 digital token services defined under the FSM Act, unless exempted.

1. Dealing in Digital Tokens
Buying, selling, or exchanging digital tokens as a business, either for yourself or for others.

2. Facilitating the Exchange of Digital Tokens
Running or supporting platforms or systems that let people trade or swap digital tokens.

3. Accepting Digital Tokens for Transmission
Accepting digital tokens from one account to send them to another, like a transfer agent or wallet provider.

4. Arranging for Transmission of Digital Tokens
Acting as a middleman or organiser to move digital tokens between accounts or wallets.

5. Inducing or Attempting to Induce Others to Deal in Digital Tokens
Promoting, marketing, or referring people to trade or deal with digital tokens.

6. Safeguarding a Digital Token
Providing custody services, like managing wallets where the service provider controls access to the tokens.

7. Carrying Out Instructions for a Customer
Executing trades, transfers, or other instructions related to digital tokens when the provider controls those tokens.

8. Safeguarding a Digital Token Instrument
Holding hardware wallets, keys, or other instruments that give access to digital tokens.

9. Acting on Instructions Related to Digital Token Instruments
Using access to wallets or token instruments to move or manage tokens based on customer instructions.

10. Advising on Digital Tokens
Offering investment advice, research, or analysis about digital tokens, through reports, articles, or direct consultation.

This applies if the business is incorporated in Singapore, regardless of whether operations are inside or outside Singapore.

There is no transitional period. Any provider needing a licence who hasn’t applied must stop operations by 30 June 2025 or face penalties.

✅ What MAS looks for

MAS grants licences only in very limited cases. To be considered, an applicant must meet several key criteria:

• Strong Business Rationale – Clear justification for operating from Singapore while serving only overseas markets.
• Reputable Oversight – The business should already be regulated by credible international authorities, such as those in FATF-compliant jurisdictions.
• No Red Flags – A clean track record with no concerning business structures or compliance issues.

In addition, applicants must demonstrate the following:

• Minimum base capital of S$250,000
• A permanent office in Singapore, with staff physically present at least 10 days per month, and a minimum of 8 hours on each of those days during its normal business hours
• A fit and proper management team, with relevant industry experience and no conflicts of interest.
• A compliance officer based in Singapore, along with robust AML/CFT policies and processes.
• Adequate technology risk and cybersecurity controls, including penetration testing and independent audits.

📌 Ongoing requirements once licensed

Applicants are expected to:

• Meet full AML/CFT compliance (FSM-N27, FSM-N28).
• Submit periodic regulatory returns (FSM-N29).
• Meet technology and cyber hygiene standards (FSM-N30, FSM-N31).
• Follow rules on disclosures, business conduct, and customer communications.
• Undergo annual audits and file reports to MAS.

MAS is taking a strict stance — only entities that are economically legitimate, internationally supervised, and able to meet high regulatory standards will be licensed. Applications must be backed by a strong business case, robust compliance framework, and a zero-tolerance approach to regulatory missteps.