Strict but fair – that is how financial services companies view the Monetary Authority of Singapore’s approach to regulation, which includes regular consultation with current and prospective market entrants.

Rethinking “Market-Friendly” Assessment

When it comes to assessing the merits of an industry regulator, an obvious starting point is to ask whether it is ‘market-friendly’. But that is an oversimplistic approach – the focus should instead be on how these bodies balance robust oversight with fostering innovation and growth.

By this standard, the Monetary Authority of Singapore (MAS) scores well with domestic financial services firms and industry bodies alike.

Principles-Based Regulation and Flexible Guardrails

The regulator practices what Cora Ang, head of legal & compliance APAC at AMINA Bank, describes as pragmatic, principles-based regulation, maintaining an open door to participants willing to operate within its framework while upholding a demanding framework.

“MAS explicitly emphasises responsible innovation within what it calls ‘flexible guardrails’, taking a risk-based approach particularly in evolving areas such as digital assets and AI,” she explains.

“Unlike prescriptive, rules-based regulation, MAS guidelines focus on principles and desired outcomes, giving firms discretion in how they meet standards rather than dictating exact compliance procedures.”

• From FX Hub to Multi-Asset Market: How Singapore Institutions Are Re-evaluating Crypto
• Hong Kong Races to Stop Lightning-Fast Money Flows Fueling New Laundering Schemes
• Singapore-Based Retail Broker ProsperUS to Shut Down 4 Years after Launch

High Stakes Enforcement

But this flexibility comes with high stakes. MAS has low tolerance for firms falling short of expectations, and its enforcement strategy amplifies individual penalties into market-wide behavioural shifts.

For example, when the regulator fined several institutions for AML/CFT failures in a 2023 money-laundering case, it simultaneously updated its supervisory guidance so that every market participant faced heightened compliance requirements and costs to meet the new baseline.

“So while MAS welcomes innovation and growth, it operates with little margin for error and uses enforcement to move the entire market, not just individual actors,” adds Ang.

Regulatory Maturity and Market Predictability

Sophisticated market participants look for regulatory maturity and systemic predictability. The MAS is increasingly viewed as a pragmatic architect that has successfully shifted the industry's focus from speculative experimentation to institutional-grade commercialisation.

That is the view of Rohit Apte, head of markets at regulated institutional digital asset markets services provider Hex Trust, who notes that for digital assets to achieve global scale, they must be underpinned by interoperable, trust-minimised infrastructure that satisfies the fiduciary requirements of the world’s largest asset managers.

“By prioritising market integrity and robust governance, the MAS is effectively establishing international benchmarks for the next generation of financial markets, attracting quality capital that prioritises long-term stability over short-term volatility,” he says.

Consultative Approach and Stakeholder Engagement

Given that MAS actively consults stakeholders and related professionals before implementing significant policy and regulatory changes, the Securities Investors Association Singapore is of the view that it is a consultative market regulator, which is “most laudable,” according to the association’s head of regulatory, Robson Lee.

Simon Forster, global co-head of digital assets at TP ICAP, says much of Singapore’s relevance in the digital asset space stems from the work of the MAS since Project Orchid in 2021, which explored the viability of a digital Singapore dollar, and more recently Project Bloom, which broadened that scope to include stablecoins and tokenised commercial bank money.

In late 2025, the regulator announced plans to start testing the issuance of tokenised bills to primary dealers, which will be settled through a wholesale central bank digital currency.

“What started as exploratory has now matured into a broad consensus that multiple forms of digital money will proliferate as payments firms, banks and private sector participants race to issue, support and provide access to these new instruments,” says Forster.

Areas for Improvement

Of course, this is not to say that the regulatory environment in Singapore could not be improved.

“As the global economy enters a more nuanced rhythm in 2026, market participants are advocating for structural refinements that enhance capital efficiency and cross-border mobility,” observes Apte.

“The industry is primarily seeking the global standardisation of asset protocols – specifically for tokenised funds and bank liabilities – to ensure seamless interoperability across international platforms and jurisdictions.”

Furthermore, there is a clear mandate for modernised post-trade infrastructure and enhanced multi-market connectivity, which would allow custodians to better align with international practices and unlock deeper liquidity pools.

“Finally, as institutional pilots for real-world assets expand, the market is calling for an agile governance model that addresses emerging technical risks without stifling the responsible innovation that defines Singapore's macro strategy,” adds Apte.

Refining Existing Rules

When asked what rule changes market participants would like to see in Singapore, Ang suggests that the real need isn't for new rules but rather refinements to how existing rules are calibrated, applied and operationalised in practice.

“The common wish list across banks, fund managers and digital asset firms centres on operational predictability, specifically more proportional requirements tied to actual business models and risk profiles,” she says. “Right now, there is ambiguity around when simplified compliance measures are acceptable versus when enhanced measures kick in. Clearer thresholds would help firms design appropriate controls from the outset.”

There have also been calls for faster, more predictable licensing and approval timelines amid concerns that some processes have become so protracted that they have shifted from friction to a genuine deterrent for market entry, especially for firms trying to assess whether Singapore is viable for their business model.

Ang calls for greater harmonisation across regulatory frameworks on the basis that firms operating across multiple licence types or business lines face overlapping but inconsistent requirements, creating compliance complexity that doesn't always map to risk.

“Clearer playbooks for emerging sectors such as digital assets would also be welcome,” she continues. “The current principles-based approach creates flexibility but also uncertainty. Firms need enough regulatory clarity to commit capital and build sustainable operations without risking sudden supervisory expectation shifts.”

Continued Consultation and Transparency

The SIAS is in constant contact with the MAS as and when it obtains significant feedback on regulatory policies and market conduct rules, including when it receives credible information regarding market misconduct or breaches.

“In this respect, we would like the MAS to continue with its consultative approach towards proposed rules implementation and receptiveness to market feedback regarding enforcement,” says Lee.

The bottom line is that participants want to play by the rules – they just want to know what the rules look like in advance.