Applying for a Cryptocurrency Service License in Singapore

Introduction to Cryptocurrency Licensing in Singapore

Singapore has emerged as a global hub for cryptocurrency businesses, thanks to its clear regulatory framework and progressive stance on digital assets. The Monetary Authority of Singapore (MAS) oversees the licensing process under the Payment Services Act (PSA), which came into effect in January 2020. This act regulates digital payment token services, including exchanges, wallet providers, and OTC platforms.

Legal Framework: Payment Services Act (PSA)

The PSA categorizes payment services into seven types and three license classes:

Regulated Payment Services:

1. Account Issuance Service

   • Issuing payment accounts or operating related services (e.g., e-wallets).

2. Domestic Money Transfer Service

   • Local fund transfers within Singapore.

3. Cross-Border Money Transfer Service

   • International remittance services.

4. Merchant Acquisition Service

   • Processing payments for merchants (e.g., POS terminals).

5. E-Money Issuance Service

   • Issuing electronic money for payments.

6. Digital Payment Token (DPT) Service

   • Trading or facilitating transactions of cryptocurrencies like BTC/ETH.

7. Money-Changing Service

   • Foreign currency exchange.

License Types:

• Money-Changing License (G-class): For currency exchange only.
• Standard Payment Institution (SPI) License: For businesses with lower transaction volumes.
• Major Payment Institution (MPI) License: For high-volume operators.

How to Obtain a Cryptocurrency License in Singapore?

Step 1: Determine License Type

• SPI: Required if monthly transactions are ≤S$3M (single service) or ≤S$6M (multiple services).
• MPI: Needed for higher volumes or e-money issuance exceeding S$5M daily.

Step 2: Meet Eligibility Criteria

1. Company Structure:

   • Must be incorporated in Singapore or have a local branch.
   • At least one executive director must be a Singapore resident.

2. Fit-and-Proper Test:

   • Directors/CEOs must have relevant experience in payments/financial services.

3. Capital Requirements:

   • SPI: S$100,000 | MPI: S$250,000.

4. Security Deposit:

   • Ranges from S$100,000 to S$200,000 based on transaction volume.

Step 3: Submit Application to MAS

• Average processing time: 6–8 months.
• Required documents include business plans, AML/CFT policies, and compliance arrangements.

Step 4: Post-License Compliance

• Annual fees: ~S$5,000 (SPI) or higher (MPI).
• Regular audits and reporting to MAS.

Taxation for Cryptocurrency Businesses

• Corporate Tax: Flat 17% for local and foreign companies.
• Tax Exemptions: Startups may qualify for 75% exemption on first S$100,000 profit.

Sandbox Regulatory Mechanism

Singapore’s fintech sandbox allows companies to test innovative solutions under relaxed regulations. Two types:

1. General Sandbox: For complex models.
2. Express Sandbox: For low-risk activities (e.g., blockchain projects).

Key Points:

• Approval within 21 days for express sandbox.
• Successful sandbox participants can transition to full licenses.

List of Licensed Cryptocurrency Companies (2023)

As of June 2023, 19 companies hold MAS licenses for crypto services:

Major Payment Institution (MPI) License Holders:

1. Fomo Pay – Digital payment token services.
2. DBS Vickers – Crypto trading.
3. Independent Reserve – Exchange platform.
4. CoinHako – Wallet and trading.
5. Crypto.com – Multi-service platform.

👉 Explore more licensed platforms

Standard Payment Institution (SPI) License Holders:

1. Triple A – Crypto payment gateway.
2. BHOP Consulting – Asset trading.

FAQs

1. What’s the difference between SPI and MPI licenses?

• SPI is for smaller-scale operations, while MPI covers high-volume transactions or e-money issuance.

2. Can licensed exchanges offer derivatives trading?

• No. PSA licenses only cover spot trading. Derivatives require a separate Recognised Market Operator (RMO) license.

3. Are security tokens regulated under PSA?

• No. PSA only applies to payment tokens (e.g., BTC). Security tokens fall under securities laws.

4. How long does the licensing process take?

• Typically 6–8 months, including preparation time.

5. Is Singapore’s sandbox program beneficial for startups?

• Yes. It provides a controlled environment to test products before full compliance.

Conclusion

Singapore’s clear regulatory framework makes it an attractive destination for cryptocurrency businesses. Whether applying for an SPI or MPI license, companies must adhere to strict AML/CFT and operational standards. Partnering with local experts can streamline the process, ensuring compliance and long-term growth.

👉 Start your licensing journey today

For tailored assistance, consult professional advisors familiar with MAS requirements.