Singapore shifts update to crypto rules for banks until 2027

The Monetary Authority of Singapore has announced a shift of its new crypto Prudential standards by a year, noting that the rollout will go into effect at the start of 2027. The development comes after industry concerns over timing and treatment of blockchain assets.

The Monetary Authority of Singapore (MAS) mentioned that it would delay the enforcement of the new rules governing how financial institutions treat digital assets until 2027. According to the premier institution, the pushback in its original target of January 2026 became necessary 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.

Singapore moves crypto rules update to January 2027

According to reports, the updated rules are based on the standards set by the Basel Committee on Banking Supervision. It will require banks to hold capital reserves against their crypto exposures in line with their risk classification. This means that digital assets seen as higher risks, such as those on public and permissionless blockchains, will attract higher capital requirements.

Also, those seen as stable and backed by eligible reserve assets could see more favorable treatment.

Meanwhile, assets considered as volatile will require capital buffers of up to 1,250%. Singapore was one of the countries that first introduced a framework for digital assets, implementing its initial rules in 2020. The country plans to balance innovation with financial stability, which has limited some forms of retail participation while encouraging adoption among institutional investors. Nevertheless, crypto remains a huge part of its financial landscape.

According to a Straits Times report, about 26% of Singapore residents hold at least a form of digital asset as of April 2025. In addition, Web3 investments accounted for 64% of the total fintech funding in 2024, totaling around $742 million.

Institutional appetite has also been on the rise, with 57% of local investors planning to increase their crypto allocations, according to the Future Finance report released by Sygnum Bank. Local banks, which the delayed rules are targeting, are also making a big push in the industry.

Competition among countries in the Web3 industry grows

With respect to the new rules, the changes are designed to clarify how banks account for digital assets in their capital, liquidity, and large exposure frameworks. This ensures that crypto exposures are effectively integrated into the existing prudential standards. MAS also proposed to update its scope of eligible reserve assets for stablecoins, further defining how lower-risk and higher-risk assets should be treated on the balance sheet.

However, industry participants have argued that the initial plan to adopt the rules will make Singapore one of the jurisdictions to implement the Basel crypto asset framework, potentially exposing local banks to regulatory disadvantages. Respondents also warned that the proposed risk classifications could unfairly penalize assets built on permissionless blockchains, a move that could stifle innovation.

One of the parties responding to the consultation was Coinbase, whose Singapore Country Director Hassan Ahmed noted that the regulator’s prudential requirements were aimed at strengthening the risk frameworks of banks, but noted that the move might lead to overcapitalization.

“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 said.

Ahmed also discussed the delay: “We are hopeful that this delay might signal a reconsideration of the contemplated prudential requirements for Singaporean institutions to better and more fully participate in innovative technology.”

In addition, he mentioned the competition in the Web3 industry. “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, the EU, and the UAE embracing this technology,” he added.