The New Regulatory Landscape of Web3 in Asia: The Industry Ecological Changes Behind Singapore's Strong Cleanup

On May 30, the Monetary Authority of Singapore (MAS) issued a statement requiring all unlicensed digital token service providers to cease all operations by June 30, or face criminal penalties. This decision has caused a huge stir in the Asian Web3 community.

Once known as the "cryptocurrency safe haven," Singapore is now taking a tough stance by completely phasing out unlicensed institutions with zero transition period. The MAS has a very broad definition of "business premises," which includes various forms such as a sofa at home, shared desks, etc. As long as individuals or institutions engage in digital token-related business within Singapore, regardless of whether their clients are domestic or overseas, they must be licensed and compliant.

The core of this regulatory storm is the Financial Services and Markets Bill (FSM Act) passed in 2022, which provides a regulatory framework for digital token services. In particular, Section 137 of the bill ends Singapore's history as a "regulatory arbitrage paradise" for crypto assets.

The core of the new regulations is the logic of "penetrative supervision", which comprehensively covers both domestic and foreign activities in Singapore, targeting the regulatory arbitrage space of "Base Singapore, serving the world". The MAS's definition of "digital token services" almost encompasses all aspects of digital asset operations: token issuance, custody services, brokerage and matching transactions, transfer payment services, verification, and governance services are all included under regulation.

The fundamental reason for Singapore's resoluteness lies in its extreme defense of the country's "financial reputation." The MAS repeatedly emphasizes that digital token services have strong cross-border anonymity attributes, making them highly 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 directly triggered the tightening of policies.

After the new regulations were introduced, Web3 practitioners in Singapore quickly differentiated. Some small project teams indicated they might completely move out of Singapore, while some local industry insiders believed this is more about clarifying and refining the existing framework. The Monetary Authority of Singapore's regulatory focus is mainly on digital payment tokens and tokens with capital market attributes, while utility tokens and governance tokens are currently not within its core regulatory scope.

As Singapore tightens regulations, Hong Kong and Dubai have almost simultaneously opened their arms. Hong Kong legislative council members openly welcome relevant enterprises to develop in the region, and on May 30, it officially became the world's first jurisdiction to establish a comprehensive regulatory framework for fiat-backed stablecoins. Dubai attracts global crypto attention with highly competitive tax policies and an independent digital asset regulatory authority.

However, the trend of globalization in regulation is becoming increasingly apparent, and no single region or country can enjoy the benefits of globalization independently while disregarding the rules. Web3 and stablecoins are essentially the inevitable result of the application of technological innovation being absorbed by the mainstream financial system.

In this regulatory earthquake, stablecoins and the tokenization of real-world assets ( RWA ) are becoming the most promising areas of development. The stablecoin market is experiencing explosive growth, with a total market value increase of over 1100% in five years. RWA is also becoming the next trillion-dollar market, with a year-on-year growth of over 110%.

Under the new regulatory framework, successfully licensed institutions are gradually establishing clear competitive barriers. Currently, only 33 companies have obtained the digital payment token (DPT) license, and regional funds and institutions are accelerating their aggregation towards these companies. Some local institutions in Singapore have already built a comprehensive compliance licensing system and are constructing the next generation of financial infrastructure through blockchain.

As global regulation accelerates towards stablecoins and RWA, compliance capabilities will become a watershed in the industry. Only those pioneers with pre-existing licenses, solid payment networks, and RWA issuance structures are likely to define the rules and move steadily forward in the new round of global digital financial order.