Licensing categories relevant to digital assets

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The licence a digital-asset business needs depends on the function its product performs. Six regimes cover the field.

The Payment Services Act 2019 is the regime most crypto businesses meet first. Section 5 forbids carrying on a business of providing any payment service without a licence. Section 6 provides three classes of licence: money-changing, standard payment institution and major payment institution. A licensee must hold a major payment institution licence once the average monthly value of transactions it processes exceeds S$ 3 million for any one payment service or S$ 6 million for two or more. The same applies once its average daily e-money float exceeds S$ 5 million.¹ The definition of "digital payment token" in section 2(1) requires a digital representation of value that is expressed as a unit, that is neither denominated in nor pegged to any currency, that is intended to be a medium of exchange accepted by the public and that can be transferred, stored or traded electronically. That definition deliberately excludes fiat-pegged stablecoins, which are e-money if they are denominated in a currency and are issued against receipt of money.² Part K, Chapter I analyses the perimeter.

The Securities and Futures Act 2001 governs tokens that are capital markets products: securities, units in a collective investment scheme and derivatives. A platform that trades such tokens needs to be an approved exchange or a recognised market operator. A dealer needs a capital markets services licence for dealing in capital markets products, while a manager of a fund holding such tokens needs a licence for fund management. The 2020 edition of the MAS Guide to Digital Token Offerings explains the classification with case studies and remains the reference text for the capital-markets perimeter.³ Part K, Chapter IV covers the regime.

Example: A Zug GmbH has issued a utility token that grants access to its decentralised storage network. It now wants to open a Singapore subsidiary that will sell the token to Asian customers for Singapore dollars and will hold customers' tokens in a hosted wallet. Classification comes first. The token confers no financial rights and is intended as a medium of exchange within the network, so it is a digital payment token under the Payment Services Act 2019 if the public accepts it as a means of payment. MAS has read that requirement broadly. Selling the token for fiat is "dealing in digital payment tokens". Holding it for customers is a "digital payment token service" of the custodial kind since 4 April 2024. The subsidiary therefore needs a payment services licence, standard if below the thresholds, major above them. It does not need a capital markets services licence, because the token is not a capital markets product. It does not need a Part 9 DTSP licence, because it serves customers in Singapore and holds a Payment Services Act licence. The Swiss side of the analysis, whether the Zug GmbH is a financial intermediary under the Anti-Money Laundering Act (AMLA; GwG), is dealt with in Part F, Chapter II.

Notes

1. Payment Services Act 2019 (2020 Rev Ed), s. 5 (licensing requirement), s. 6(4)(b) (the seven payment services: account issuance, domestic money transfer, cross-border money transfer, merchant acquisition, e-money issuance, digital payment token service, money-changing) and s. 6(5) (thresholds for the major payment institution licence), text as published on Singapore Statutes Online. ↩
2. Payment Services Act 2019, s. 2(1), definition of "digital payment token" (digital representation of value, other than an excluded digital representation of value, that is expressed as a unit, is not denominated in or pegged to any currency, is or is intended to be a medium of exchange accepted by the public, and can be transferred, stored or traded electronically). ↩
3. MAS, "A Guide to Digital Token Offerings", first issued 14 November 2017 and last updated 26 May 2020, building on the MAS clarification of 1 August 2017 that offers of digital tokens constituting products regulated under the Securities and Futures Act would be regulated. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.