The New Landscape of the Industry After the Tightening of Web3 Regulations in Singapore

The Monetary Authority of Singapore (MAS) issued a statement on May 30, (, requiring unlicensed digital token service providers to cease all operations by June 30, or face criminal penalties. This initiative marks a significant shift in Singapore's crypto regulatory policy and has far-reaching implications for the Web3 industry in Asia and globally.

The Shift in Singapore's Regulatory Policies

The core of Singapore's recent regulatory tightening is the Financial Services and Markets Bill passed in 2022, ) FSM Act (. This bill provides a regulatory framework for digital token services, particularly Article 137, which ends Singapore's history as a "regulatory arbitrage paradise" for crypto assets. Any individual or entity with a business presence in Singapore providing digital token services to overseas users must obtain a DTSP license.

MAS adopts a "penetrative regulatory" logic, comprehensively covering both onshore and offshore operations in Singapore, targeting the regulatory arbitrage space of "Base Singapore, serving the globe." The definition of digital token services almost encompasses all aspects of digital asset business, including token issuance, custody services, brokerage matching transactions, transfer payment services, verification, and governance services.

The reason for Singapore's resoluteness lies in its extreme defense of the country's "financial reputation." The MAS emphasizes that digital token services have strong cross-border anonymity attributes, making them susceptible to illegal activities such as money laundering and terrorist financing. The FTX collapse and the frequent occurrence of large-scale money laundering cases have also become direct triggers for tightening policies.

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Industry Response and Differentiation

After the introduction of the new regulations, Web3 practitioners quickly differentiated into different camps. Some small project teams believe that the threshold for applying for a DTSP license is too high and may choose to relocate from Singapore. Meanwhile, some local industry insiders believe that Singapore's regulatory policies have not undergone a drastic shift, but rather a clarification and refinement of the existing framework.

The MAS's regulatory focus is primarily on digital payment tokens and tokens with capital market attributes, while utility tokens and governance tokens are currently not at the core of its regulation. Individual practitioners have become a gray area in regulation, and some KOLs and exchange practitioners have chosen to suspend their operations or remain on the sidelines.

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Changes in the Global Competitive Landscape

As Singapore tightens its regulations, Hong Kong and Dubai have almost simultaneously opened their arms, trying to attract cryptocurrency companies and talent. Hong Kong legislators have publicly invited Singaporean cryptocurrency companies to relocate and released the "Stablecoin Regulation" on May 30, becoming the world's first jurisdiction to establish a comprehensive regulatory framework for fiat-backed stablecoins.

Dubai attracts global crypto attention with favorable tax policies and an independent digital asset regulatory authority. However, the trend of globalization in regulation is becoming increasingly evident, and it is impossible for any region to enjoy the benefits of globalization while remaining independent. Web3 and stablecoins are essentially the inevitable result of technological innovation being absorbed by sovereign financial regulatory systems.

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New Opportunities: Stablecoins and RWA

In this regulatory transformation, stablecoins and the tokenization of real-world assets ) RWA ( have become the most promising areas for development. The stablecoin market is experiencing explosive growth, with an increase of over 1100% in five years. RWA is also expected to become the next trillion-dollar market, with the total on-chain value of RWA growing over 110% year-on-year.

Countries around the world are fiercely competing for dominance in stablecoins. The United States has introduced the "GENIUS Act" in an attempt to bring stablecoins into the national strategic framework, while the European Union's "Regulation on Markets in Crypto-assets" seeks to redefine the digital financial order with a unified regulatory framework.

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Advantages of Locally Licensed Institutions

In the new regulatory environment, successfully licensed institutions are gradually building clear competitive barriers. Currently, only 33 companies have obtained the digital payment token )DPT( license, including Coinbase, Circle, Anchorage, DBS Vickers, Matrixport, and others.

Some local institutions in Singapore have established a comprehensive compliance licensing system and are building the next generation of financial infrastructure through blockchain. MetaComp, as a large payment institution authorized by MAS )MPI(, not only holds licenses for cross-border payments and DPT business but has also built a comprehensive compliance system covering multiple licenses including payment, securities, custody, and derivatives.

This fully compliant localized path is a significant advantage for both local business development and partners needing to operate in Singapore. MetaComp has established a cooperative network with globally licensed institutions and has built localized settlement infrastructure in multiple regions, providing efficient and low-cost solutions for global capital flow under compliance.

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Future Outlook

As global regulation deepens, compliance capability will become a watershed for the industry. Only those pioneers equipped with upfront licenses, solid payment networks, and RWA issuance structures are expected to define the rules and move forward steadily in the new round of global digital financial order. The tightening of regulations in Singapore is not only a challenge but also a driving force for the long-term healthy development of the industry.