New Singapore Digital Asset Regulatory Policies: Industry Restructuring and Future Opportunities

The recent regulatory statement issued by the Monetary Authority of Singapore (MAS) requires all unlicensed digital token service providers to cease operations by June 30, causing a stir in the industry. This tough policy marks a complete shift in Singapore's crypto regulatory logic and will have far-reaching effects on the global Web3 industry landscape.

Policy Background and Key Points

The new policy stems from the Financial Services and Markets Bill passed in 2022, which focuses on implementing "penetrative regulation" for digital token services. All individuals or institutions that provide digital token services to overseas users from a business location in Singapore must obtain a Digital Token Service Provider (DTSP) license.

The MAS's definition of "digital token services" almost covers all aspects of digital asset business, including token issuance, custody, trading, payment, and more. Unlicensed individuals must immediately cease overseas operations and cannot use "under application" status as a legal basis.

The background of this policy shift includes:

1. International regulatory requirements are increasing to prevent "regulatory arbitrage"
2. Reputation loss caused by events such as the FTX incident
3. Preventing money laundering and terrorist financing risks

Industry Response and Coping Strategies

After the new regulations were introduced, Web3 practitioners quickly divided into different camps:

1. Some small projects are considering moving away from Singapore.
2. Some enterprises actively apply for the DTSP license.
3. Individual practitioners have become a regulatory gray area, with some choosing to pause their business and wait and see.

The application for a DTSP license has a high threshold, requiring an initial capital of 250,000 SGD, a resident compliance officer, independent audits, etc. This poses a challenge for many startups.

Changes in the Global Competitive Landscape

As Singapore tightens its policies, Hong Kong and Dubai are quickly launching a "battle for talent":

1. Hong Kong launches the world's first comprehensive regulatory framework for fiat-backed stablecoins.
2. Dubai offers favorable tax policies and establishes an independent digital asset regulatory authority.

However, under the trend of regulatory globalization, it is unlikely that there will be completely unregulated "regulatory arbitrage havens".

New Opportunities: Stablecoins and RWA

Against the backdrop of tightening regulations, stablecoins and the tokenization of real-world assets (RWA) have become the most promising areas:

1. The market value of stablecoins has increased by over 1100% in five years, significantly enhancing the activity of cross-border payments.
2. The RWA market size exceeds $23 billion, with a year-on-year growth of 110%.
3. Countries around the world are actively laying out the "minting rights" for digital currency.

Advantages of Local Licensed Institutions

Institutions that have successfully obtained licenses are building clear competitive barriers. Currently, only 33 companies have obtained digital payment token (DPT) licenses, including well-known companies like Coinbase and Circle.

Some local institutions, such as MetaComp, have established a comprehensive compliance licensing system covering multiple fields such as payments, securities, custody, and derivatives. This fully compliant path provides significant advantages for local business development and partnerships.

Future Outlook

1. Compliance capability will become a watershed in the industry.
2. Institutions with pre-licensing, stable payment networks, and RWA issuance capabilities are more competitive.
3. Stablecoins and asset tokenization will be key development focuses in the future.

In the new round of reshaping the global digital financial order, compliance pioneers are expected to take the lead in defining rules and expanding the market.