Singapore Crypto Licence Explained: PSA, DPT & MAS Approval Requirements Simplified

If you are exploring how to start a crypto business in Singapore, you have likely encountered a range of terms that seem straightforward at first but quickly become confusing when you try to connect them.

You hear about:

• The Payment Services Act (PSA)
• Digital Payment Token (DPT) services
• The need for a MAS crypto licence
• Compliance requirements like PSN02
• Licensing categories such as SPI vs MPI

Individually, each concept makes sense.

But when you try to put them together, the bigger picture often feels fragmented.

The real challenge is not understanding each term—it is understanding how they all fit into a single, coherent regulatory framework that governs crypto businesses in Singapore.

This article simplifies that framework and explains, in clear and practical terms, how the Singapore crypto licence system works, what MAS is actually regulating, and what you need to do to get approved.

The Starting Point: What Is a “Crypto Licence” in Singapore?

Let’s begin with the most important clarification.

There is no licence in Singapore called a “crypto licence.”

Instead, crypto businesses are regulated under the Payment Services Act (PSA), and depending on the activities you perform, you may be required to obtain a licence to provide Digital Payment Token (DPT) services.

In other words:

A “crypto licence” in Singapore is essentially a PSA licence that covers DPT-related activities.

This distinction matters because it shifts how you think about regulation.

You are not being licensed as a “crypto company.”

You are being licensed to perform specific regulated payment services involving digital assets.

Understanding the Payment Services Act (PSA)

The PSA is the foundation of crypto regulation in Singapore.

It is designed to regulate a wide range of payment services, including:

• Digital payment token services
• Money transfer services
• Merchant acquisition
• E-money issuance

For crypto businesses, the relevant category is:

Digital Payment Token (DPT) services

What Is a Digital Payment Token (DPT)?

A Digital Payment Token is essentially a type of digital asset that:

• Is not denominated in any currency
• Is used as a medium of exchange
• Can be transferred, stored, or traded electronically

This includes most cryptocurrencies such as Bitcoin, Ethereum, and similar assets.

Why This Definition Matters

Because MAS does not regulate “crypto” as a broad concept.

It regulates:

Activities involving Digital Payment Tokens.

Key Insight

If your business interacts with DPTs in a way that falls within regulated activities, you will likely need a licence.

What Activities Require a MAS Crypto Licence?

This is where many founders get it wrong.

They assume that licensing is required only for exchanges or custodians.

In reality, MAS regulates a broader range of activities.

You may require a licence if your business:

• Buys or sells crypto (dealing in DPTs)
• Operates a trading platform (exchange activity)
• Facilitates transactions between users
• Transfers digital assets
• Provides custody of crypto assets

Important Principle

MAS regulates based on:

What your business does—not what it calls itself.

This means that even if your platform is:

• Non-custodial
• API-based
• Decentralised in design

You may still fall within the regulatory perimeter if you:

• Facilitate transactions
• Influence execution
• Enable trading

The Two Types of MAS Licences: SPI vs MPI

Once you determine that your activities are regulated, the next step is to choose the appropriate licence type.

Under the PSA, there are two main categories:

Standard Payment Institution (SPI)

This licence is designed for:

• Smaller-scale operations
• Businesses with lower transaction volumes

Key Features

• Lower capital requirement (SGD 100,000)
• Transaction limits apply
• Less complex regulatory obligations

Major Payment Institution (MPI)

This licence is designed for:

• Larger-scale operations
• High transaction volumes

Key Features

• Higher capital requirement (SGD 250,000)
• No transaction limits
• Stronger compliance requirements

Strategic Consideration

Choosing between SPI and MPI is not just about size.

It is about:

Your growth plans and business model.

If your business is designed to scale, applying for SPI may create limitations later.

What MAS Is Actually Assessing (Beyond Licensing)

At this point, many founders believe that meeting the licensing criteria is enough.

But MAS is not simply checking whether you meet minimum requirements.

It is assessing whether your business can operate safely within Singapore’s financial system.

This assessment is built around three core pillars:

1. AML/CFT Compliance (PSN02)

MAS places significant emphasis on your ability to prevent financial crime.

This includes:

• Customer due diligence
• Transaction monitoring
• Sanctions screening
• Suspicious transaction reporting
• Travel Rule compliance

This framework is governed by:

MAS Notice PSN02

2. Governance and Fit & Proper Requirements

MAS evaluates the people behind the business.

This includes:

• Directors
• Shareholders
• Senior management
• Compliance officers

They must meet criteria relating to:

• Integrity
• Competence
• Financial soundness

3. Technology and Operational Resilience

Crypto businesses rely heavily on technology.

MAS expects:

• Secure systems
• Reliable infrastructure
• Strong cybersecurity
• Clear custody and key management

Key Insight

Meeting MAS requirements is not about ticking boxes.

It is about demonstrating:

Operational readiness across compliance, governance, and technology.

The Role of PSN02 in MAS Approval

One of the most critical components of your application is compliance with PSN02, which governs AML/CFT obligations for DPT service providers.

PSN02 requires you to implement:

• A risk-based approach to compliance
• Customer identification and verification
• Ongoing monitoring of transactions
• Reporting of suspicious activities

MAS uses PSN02 to assess whether your business can:

Detects and prevents financial crime effectively.

If your AML framework is weak or not operational, your application will not progress smoothly.

Fund Flows: Where Your Business Becomes Real

Another critical element of the application is your fund flow diagrams.

These diagrams show:

• How funds enter your system
• How they move internally
• Where they are stored
• How they exit

MAS relies on fund flows to:

• Understand your business model
• Identify risk points
• Assess where controls are needed

If your fund flows are unclear, incomplete, or inconsistent, MAS will not be able to assess your application properly.

The MAS Application Process (Simplified)

Let’s simplify the process into clear stages.

Stage 1: Preparation

This includes:

• Defining your business model
• Determining licensing requirements
• Building AML and compliance frameworks
• Designing fund flows

Stage 2: Submission

You submit your application with all required documentation.

Stage 3: Review and Query Phase

MAS:

• Reviews your application
• Raises questions
• Requests clarification

This is the longest stage of the process.

Stage 4: In-Principle Approval (IPA)

If MAS is satisfied, it issues an IPA subject to conditions.

Stage 5: Final Approval

Once conditions are met, your licence is granted.

How Long Does It Take?

For a well-prepared business:

6 to 9 months is a realistic timeline

Delays typically occur due to:

• Weak AML frameworks
• Poor fund flow clarity
• Inconsistent documentation
• Applying too early

Common Misconceptions About MAS Crypto Licensing

“We don’t hold funds, so we don’t need a licence”

Not necessarily true—facilitation alone can trigger regulation.

“We can apply first and build later”

MAS expects readiness at submission.

“Minimum capital is enough”

MAS looks at financial sustainability, not just minimum thresholds.

“Marketing is separate from licensing”

Marketing is part of regulatory compliance and can impact your application.

How CRYPTOVERSE Can Help

Understanding Singapore’s crypto regulatory framework is one thing.

Applying it correctly to your business is another.

That’s where CRYPTOVERSE comes in.

We help clients:

• Determine whether they need a MAS licence
• Map their business activities under the PSA
• Structure their operations to meet regulatory expectations
• Build compliant AML/CFT frameworks aligned with PSN02
• Prepare and manage the entire application process

Our approach ensures that your application is not just complete, but also clear, consistent, and aligned with what MAS expects to see.

Final Thought

Singapore’s approach to crypto regulation is often described as strict—but fair.

The rules are clear.

The expectations are high.

And the process is structured.

The real challenge is not understanding the framework.

It is aligning your business with it.

Because in Singapore:

You are not just applying for a licence.
You are proving that your business can operate at a regulatory standard.

Once you understand that, everything else becomes much clearer.

FAQs