On-Ramp, Off-Ramp: How MAS Views Crypto Gateways in 2025
- Eastern Mezzanine
- May 2
- 5 min read
Updated: May 7
Love it or hate it, crypto continues to intrigue with its promise of decentralising finance and creating a more democratic financial system for one and all. Right here in Singapore, a recent study revealed that more Singaporeans own crypto; in 2024, about 26 per cent of Singaporeans own crypto, up from 24.4 per cent in 2023.
Crypto is not only used as an investment vehicle, with more retail and institutional investors utilising digital payment tokens (DPTs) for payment. A report by blockchain analysis firm Chainalysis found that in Q2 of 2024, nearly USD 1 billion (SGD 1.3 billion) of crypto was received by merchant services in Singapore, a significant spike from any other quarter in the previous two years (USD 4.9 to 489.1 million).
And what is the conduit that enables users to use crypto for payments?
The answer is crypto gateways. Crypto gateways and the rest of the crypto industry are regulated by the Monetary Authority of Singapore (MAS), the island nation’s own central bank. MAS’s stance towards crypto can best be described as balanced between support and caution, as it acknowledges the technology’s potential to enhance financial markets while remaining wary of its risks.
This article delves into MAS’s latest regulatory perspectives and directives towards crypto and crypto gateways, alongside related compliance requirements.
But first, what are crypto gateways?
Functioning as, well, the gateways into the wonderful world of crypto, crypto gateways facilitate conversions between government-issued fiat currencies (Eg: SGD, USD, and EUR) and cryptocurrencies or digital payment tokens (Eg: BTC, ETH, and stablecoins).
There are two broad types of crypto conversion services available:
On-Ramps: Allow users to buy cryptocurrencies using fiat money (eg: bank transfer and credit card)
Off-Ramps: Allow users to sell cryptocurrencies and receive fiat money back into their traditional bank accounts or wallets
Such conversion services are typically offered by cryptocurrency exchanges (eg: Bitget Wallet and Coinhako), payment processors, and some fintech platforms (eg: Revolut).
Regulating crypto gateways, the Payment Services Act (PSA) way
As crypto gateways facilitate the purchase, sale, and exchange of cryptocurrencies, it naturally falls under the purview of MAS’s Payment Services Act (PSA). Specifically, these gateways fall under the Digital Payment Token (DPT) service provider category.
Depending on the scale of operations, crypto gateway businesses will need to apply for either a Standard Payment Institution (SPI) or Major Payment Institution (MPI) license under the PSA, specifying DPT services as one of their activities.
Learn more about the PSA’s licenses and their requirements here: Who’s Licensed, and How: A Breakdown of Payment Services Licences in Singapore
MAS: Threading the tightrope between risk and innovation
Given the inherently volatile nature of crypto, it stands to reason that MAS would adopt a cautious, risk-focused approach towards all related services, including crypto gateways. Let us first take a look at how MAS tackles the risks of crypto.
Addressing the risks of crypto
Specifically, MAS is of the view that DPT trading poses high risk for retail customers. According to its regulatory measures for DPT services dated November 2023, MAS asserts that retail customers lack oversight over all associated risks and may not have the financial resources to endure the immense losses they may incur in crypto markets.
As a result, MAS mandates that businesses engaging in retail crypto activities—this effectively includes crypto gateways with a retail component—must discourage crypto speculation amongst retail customers by:
Determining their risk awareness to access DPT services
Not offering any incentives to trade in crypto
Not providing financing, margin, or leverage transactions
Not accepting locally issued credit card payments
Limiting the impact crypto has on a customer’s net worth
To further discourage crypto trading by the general public, MAS does not allow DPT service providers to advertise their services in public spaces. This includes public transport, public websites, and even through social media influencers on Instagram and TikTok. They are, however, permitted to advertise their services on their corporate platforms.
To complement the above restrictions on retail DPT services, MAS also requires DPT service providers to build investor protection measures into their systems, ensuring high levels of availability and recoverability that are in line with existing requirements imposed on regular financial institutions.
Core to these protection measures are anti-money laundering (AML) and countering the financing of terrorism (CFT) controls, especially since the anonymous and cross-border nature of cryptocurrencies makes them vulnerable to illicit activities. According to MAS’s most recent Notice PSN02 dated April 2024, it expects licensees to implement the following AML/CFT measures:
Measure | Requirement |
Risk assessment and risk mitigation | Identify, assess, and understand Money Laundering (ML) and Terrorism Financing (TF) risks. |
Customer due diligence (CDD) | Perform CDD measures to "Know Your Customer" (KYC). |
Reliance on third parties | DPT service providers must engage eligible third parties to perform elements of the CDD process. |
Correspondent accounts and wire transfers | Address risks associated with other Virtual Asset Service Providers (VASPs) and adhere to the Financial Action Task Force (FATF)’s "Travel Rule”. |
Record keeping | Maintain adequate records of all relevant data. |
Suspicious transaction reporting (STR) | Implement measures to identify and report suspicious transactions. |
Internal policies, compliance, audit, and training | Establish a robust, AML/CFT-compliant internal framework. |
This is a summary of the Notice PSN02. For full details, please refer to the document on MAS’s website.
As the table above demonstrates, MAS has progressively tightened AML/CFT requirements for DPT service providers, expecting high standards of compliance across seven identified categories. As Ms. Ho Hern Shin, Deputy Managing Director (Financial Supervision), MAS, aptly said,
“DPT service providers have the obligation to safeguard the interests of consumers who interact with their platforms and use their services.”
Risks there may be, yet crypto remains promising
While MAS is strict with the regulation of DPT services, it also acknowledges the innovative potential of crypto to transform the financial landscape, actively encouraging the development of blockchain technology and digital assets to improve efficiencies in financial markets.
In recognition of crypto’s potential, MAS has an ongoing initiative called Project Guardian. Started in May 2022, Project Guardian sees policymakers and the financial industry coming together to explore the tokenisation of real-world assets (RWA) to enhance the liquidity and efficiency of financial markets. This project also aims to build a stable and sustainable digital asset ecosystem informed by sound policies and regulatory frameworks.
At present, several pilots are being run under Project Guardian, split into three broad categories: asset & wealth management, fixed income, and foreign exchange.
Some noticeable pilots include:
Deutsche Bank’s partnership with Memento Blockchain and Interop Labs to build a full-service fund solution on a blockchain
DBS Bank, JP Morgan, and SBI Digital Asset Holdings’ collaboration to perform foreign exchange and government bond transactions against liquidity pools. These pools comprised Singapore Government Securities Bonds, Japanese Yen (JPY), and Singapore Dollar (SGD)
Ant International and DBS Bank’s collaborative launch of Treasury Tokens, a 24/7 treasury and liquidity management solution
In essence, while MAS is wary of retail investors engaging with DPT services, it also continues to acknowledge their value in enhancing the financial ecosystem.
Shore up your crypto compliance with Eastern Mezzanine
Operating a crypto gateway—and, by extension, any other crypto service—in Singapore is not for the faint-hearted, given the litany of regulations that it is subject to under MAS’s purview. While MAS is open to crypto innovation via Project Guardian, it continues to exercise caution by prioritising financial stability, consumer protection, and mitigating illicit finance risks.
To help you navigate the conundrum of regulations, Eastern Mezzanine stands ready with our dedicated team of legal counsels. Armed with deep expertise in the management of DPTs and all associated services, we are ready to help you get started and stay compliant with every regulation mandated by MAS.
