Analysis of Singapore DTSP New Regulations: The Era of Cryptocurrency Regulation Has Arrived

Recently, Singapore's Financial Services and Markets Bill is set to officially take effect on June 30, 2025, and the highly anticipated new DTSP regulations will also begin to be implemented. This marks Singapore's formal entry into a strict regulatory era for encryption assets, and projects and practitioners without licenses may face a new round of large-scale migration.

Milestones in Singapore's Encryption Regulation

Looking back on September 24, 2021, multiple ministries in our country jointly issued strict regulatory policies targeting virtual currency transactions, leading to significant changes in the domestic encryption industry. This policy clearly defines virtual currency-related activities as illegal financial activities and comprehensively prohibits various operations including the exchange of legal currency for virtual currency, exchanges between virtual currencies, and token issuance financing.

Since then, a large number of encryption practitioners have chosen to migrate to Singapore, injecting new vitality into Singapore's economy in the short term, and also helping it become the Asian encryption center. However, considering the financial risks of encryption assets, the Singapore government has also begun to formulate corresponding regulatory measures. As early as April 2022, Singapore passed the Financial Services and Markets Act, laying the foundation for the regulation of encryption assets.

Interpretation of DTSP License Regulations

needs to apply for the DTSP license entity.

According to the new regulations, the following two types of entities need to apply for a DTSP license:

1. Individuals or legal entities engaged in encryption asset business within Singapore.
2. A company registered in Singapore that provides digital token services to overseas clients.

It is worth noting that the new regulations have a very broad definition of "conducting business in Singapore"; as long as one is actually within Singapore, whether operating encryption asset business through physical stores or online channels, it is considered as "conducting business in Singapore."

regulated business scope

The new DTSP regulations mainly focus on regulating transactions and financial activities related to encryption assets, specifically including:

• Digital Token Trading
• Digital Token Trading Matching
• Digital Token Custody
• Digital Token Management
• Digital Token Consulting Services

exempt regulated business

Some technology support services that are related to encryption assets but are more marginal are not within the regulatory scope, for example:

• Pure data storage service
• Authentication Service
• Network communication services
• Non-critical technical support services

Impact on the Industry and Future Outlook

The introduction of this regulatory policy was not sudden, but rather provided a 3-year transition period. However, many practitioners may not have fully recognized this, and now they have to face the situation of migrating again.

For cryptocurrency practitioners seeking new destinations, Southeast Asia, including Thailand, Vietnam, Malaysia, and the Philippines, has shown a relatively open attitude towards encryption assets in recent years, making it a potential choice. Additionally, the Middle East, such as Dubai and Abu Dhabi, has also attracted the attention of some practitioners due to its flexible capital flow policies.

In the long run, the compliance operation of encryption assets will become a global trend. For practitioners who hope to develop long-term in the industry, it will become crucial to pay attention to compliance construction and to layout relevant licenses as early as possible. This is not only related to individual development, but also a necessary measure to promote the healthy and sustainable development of the entire industry.