Respondents warned that the proposed risk classifications could unfairly penalize assets built on permissionless blockchains, potentially stifling innovation.
The Monetary Authority of Singapore has deferred new crypto prudential standards by a year, with the rollout now set to go into force at the start of 2027.
The move followed industry concerns over timing and treatment of blockchain assets.
The Monetary Authority of Singapore (MAS) said Thursday it would delay the rollout of new rules governing how banks treat cryptoassets until 2027, pushing back its original target of January 1, 2026 following responses to a consultation on the changes.
“We will continue to monitor developments in the cryptoasset landscape and global regulatory standards to ensure alignment and support responsible innovation,” the regulator said.
The updated rules, based on standards set by the Basel Committee on Banking Supervision, will require banks to hold capital reserves against their crypto exposures in line with their risk classification.
Cryptoassets deemed higher risk — such as those on public, permissionless blockchains — will attract higher capital requirements. Those deemed stable and backed by eligible reserve assets could receive more favorable treatment. Assets considered extremely volatile require capital buffers of up to 1,250%.
Singapore was one of the earliest jurisdictions to establish a framework for digital assets, implementing its initial rules in 2020. The country has sought to balance innovation with financial stability that has limited some forms of retail participation while encouraging institutional adoption.
Nevertheless, crypto remains a growing part of its financial landscape. About 26% of Singaporeans held some form of cryptocurrency as of April this year, according to a Straits Times report, and web3 investments accounted for 64% of total fintech funding in 2024, totaling US$742 million. Institutional appetite is also rising, with 57% of local investors planning to increase crypto allocations, according to Sygnum Bank’s Future Finance Report.
Local banks, at which the delayed rules are targeted, have followed suit. DBS recently launched tokenised structured notes on Ethereum, expanding on its prior work with tokenised bonds, while other lenders have pursued pilot projects on asset tokenisation and stablecoin integration.
The changes are designed to clarify how banks account for cryptoassets in their capital, liquidity and large exposure frameworks, effectively integrating crypto exposures into existing prudential standards. MAS also proposed updates to the scope of eligible reserve assets for stablecoins and further defined how lower-risk and higher-risk cryptoassets should be treated on balance sheets.
However, industry participants argued that Singapore’s initial plan to adopt the measures in 2026 would make it one of the first jurisdictions to implement the Basel cryptoasset framework, potentially exposing local banks to regulatory disadvantages. Respondents also warned that the proposed risk classifications could unfairly penalize assets built on permissionless blockchains, stifling innovation.
Among those responding to MAS’s consultation was Coinbase, whose Singapore Country Director Hassan Ahmed said the regulator’s prudential requirements were aimed at strengthening banks’ risk frameworks but might lead to overcapitalisation.
“MAS has always prioritised user protection through cautious and measured regulation, and its latest response is another instance of this posture. Singapore has also been consistently pragmatic in finding the balance between innovation and protection,” he told Decrypt.
“We are hopeful that this delay might signal a reconsideration of the contemplated prudential requirements in order for Singaporean institutions to better and more fully participate in innovative technology.”
Ahmed added that while Singapore has long positioned itself as a Web3 hub, competition is intensifying. “Although Singapore was early, the global regulatory baseline has equalised since the passing of the GENIUS Act and with other leading hubs like Hong Kong, EU and UAE embracing this technology,” he said.
“Many markets are refining existing rules to be more inclusive and invite institutional and corporate participation – particularly with respect to stablecoins. We are also seeing leading economies embrace crypto technology as crucial to their national and strategic competitiveness.”
