The Only Constant is Change: State of Crypto Regulations Across the Globe (Part 2)

As featured in the Uitgeverij Den Hollander Compliance, Ethics and Sustainability Journal

Introduction – The Race Is On

The world’s major financial centres are racing to become the dominant hub for institutional cryptocurrency adoption, as crypto intersects more meaningfully with traditional finance (TradFi). With the rise of fiat currency-backed stablecoins, the familiarity of regulation and real-world value is drawing more TradFi institutions. The stakes are clear: jurisdictions that provide regulatory clarity first will attract the capital, talent, and infrastructure that define tomorrow's financial system.

For business leaders and compliance professionals, this regulatory competition offers both opportunity and complexity. Companies can weigh jurisdictional differences for strategic advantage, whether choosing where to launch crypto products or structure their operations.

We focus this article on two jurisdictions leading this regulatory race, Singapore as a leading innovator in blockchain and digital assets and the financial centre of Asia, and the UAE as the gateway between East and West. (In the previous installation, where we focused on three jurisdictions: the US and EU as the world's largest financial markets and the UK leveraging its historical role as a global financial hub.) We outline key developments in each country’s approach, how they balance innovation with security, and considerations for regulated institutions and compliance professionals navigating the global patchwork of regulations.

Singapore – Asia’s innovation and financial capital prioritizing onshore adoption and supervision

Singapore is amongst Asia’s leading crypto hubs, with the Monetary Authority of Singapore (MAS) adopting a risk-based, innovation friendly approach towards crypto asset regulation. Through phased rules under the Payment Services Act 2019 (PSA) and the Financial Services and Markets Act 2022 (FSMA), MAS has tightened customer protections, addressed money laundering and terrorism financing risks, and promoted adoption and institutional tokenisation. For exchanges, stablecoin issuers, or traditional finance firms seeking to innovate with asset tokenization use cases in Singapore, the MAS has proven to a be first mover in digital assets regulation through established licensing frameworks with strict enforcement of stated requirements.

1. Regulating digital finance within and outside of Singapore

The PSA, which came into effect in January 2020, created a framework for MAS to regulate the fast-moving nature of digital payment technologies, including cryptocurrencies. The PSA not only defined cryptocurrencies under the term ‘Digital Payment Token’ (DPT) but instituted a licensing regime for cryptocurrency exchanges providing DPT services in Singapore. Under the PSA, MAS has approved 34 institutions offering Digital Payment Token (DPT) services to date, including for major exchanges like Coinbase and Crypto.com. ^[1] 

FSMA, enacted in April 2022, complements existing requirements within the PSA (including other existing regulation such as the Securities and Futures Act 2001 (SFA)) and seeks to address a gap in the current regulatory framework by creating a new licensing requirement for entities established in Singapore but providing services associated with DPTs or digital representations of capital markets products as defined under the SFA to customers outside of Singapore. Therefore, the FSMA effectively expands MAS’ territorial reach over Digital Token Service Providers (DTSPs) offering services outside of Singapore.

On 30 May 2025, MAS announced that firms offering crypto services to overseas clients must register and hold a license under the FSMA by 30 June 2025 or cease operations, with no transition period. ^[2] This has prompted major platforms, including Bitget and Bybit to consider relocating to more accommodating jurisdictions, such as Hong Kong and Dubai. ^[3] MAS clarified that “money laundering risks are higher in such business models and if their substantive regulated activity is outside of Singapore, MAS is unable to effectively supervise such persons”. ^[4] Given these risks, the MAS will issue a DTSP license only in “extremely limited circumstances”. ^[5]

Firms offering DPTs, DTSPs and those establishing operations in Singapore should understand the MAS’ regulatory reach related to offshore activities, its high bar towards licensing, and MAS’ general hesitation towards certain business activities outside of Singapore. More importantly, given MAS’ focus on money laundering risks, especially in a cross-border context, these considerations should be thoroughly addressed from risk identification to its inclusion within internal controls to demonstrate the firm’s ability to mitigate and manage potential activities and engagement with its customers, both locally in Singapore and in other jurisdictions the institution may serve.

2. Responsible innovation through asset tokenization and interoperability

Singapore is also actively promoting institutional adoption of tokenised finance through Project Guardian. MAS has, under this project, convened over “40 financial institutions, industry associations and international policymakers across seven jurisdictions to carry out industry trials on the use of asset tokenisation in capital markets”. ^[6] MAS noted that these efforts reflect a growing interest in tokenisation and Singapore’s commitment to scaling tokenised capital markets through industry-wide coordination. MAS has also developed the Global Layer One (GL1) platform, which aims to develop “an ecosystem of compatible market infrastructures” using a shared DLT ledger across regulated financial institutions, led by a core group of banks which includes Bank of New York Mellon, Citi, J.P. Morgan, MUFG and Societe Generale-FORGE.^{[7], [8]}

3. Advancing stablecoin regulations ahead of its peers

On 15 August 2023, MAS finalised its stablecoin regulatory framework, which apply to single-currency stablecoins (SCS) pegged to the Singapore Dollar or any G10 currency and issued in Singapore, making it amongst the first jurisdictions to have such rules. ^[9] To qualify as “MAS-regulated stablecoins,” issuers must meet strict requirements on value stability, capital adequacy, redemption rights, and disclosure. Only those meeting the full criteria may label their products accordingly, with penalties imposed for misrepresentation. As MAS explained, “MAS’ stablecoin regulatory framework aims to facilitate the use of stablecoins as a credible digital medium of exchange, and as a bridge between the fiat and digital asset ecosystems”. ^[10]

Global stablecoin issuers, especially those with a significant presence in Singapore, should consider a multi-license strategy to ensure compliance in MAS’ stablecoin framework and to ensure interoperability. Issuers should evaluate existing programmes for areas to harmonize globally while appending certain elements related to satisfy local requirements. For example, Paxos issues USD-denominated stablecoins through its approval by the New York State Department of Financial Services (NYDFS) and has received in-principle approval in November 2023 from MAS to issue stablecoins that comply with Singapore’s framework. ^{[11], [12]}

UAE – An agile framework for regulating onshore and across financial free zones

The UAE has adopted a slightly different playbook, positioning itself as a jurisdiction for crypto innovation. Confidence in the UAE’s regulatory framework has strengthened of recent years, particularly following the UAE’s removal from Financial Action Task Force or FATF’s “gray list” in February 2024. ^[13] The growing list of newly licensed firms in the UAE demonstrates its popularity as an international base for crypto institutions. As a first mover in crypto asset regulation, those vying for an opportunity to operate in the UAE will have to navigate through a sophisticated regulatory framework based on specifications from regional regulators, particularly in Dubai and Abu Dhabi.

The UAE has five virtual asset regulators, the Securities and Commodities Authority (SCA), the UAE Central Bank (CBUAE), Dubai Financial Services Authority (DFSA), Financial Services Regulatory Authority (FSRA), and Dubai Virtual Assets Regulatory Authority (VARA). Its regulatory framework is layered and nuanced, with federal laws, emirate-level laws and free-zone regulations all operating simultaneously. The UAE also has two financial free zones, Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC), operating under English common law, ^{[14], [15]} each with their regulators: FSRA for ADGM and DFSA for DIFC. ^[16] Virtual asset activities conducted onshore (i.e., outside ADGM and DIFC) are regulated primarily by the SCA and the UAE Central Bank. ^[17] 

Depending on its service offerings and capabilities, firms must weigh whether to be regulated through VARA, FSRA, or through a combination of local regulatory regimes. This creates a complex web of licensing and supervisory requirements, based on the applicable regulatory framework. Firms must be able to establish, maintain and evidence sufficient risk and compliance programmes, including through audits and inspections post-licensure, to ensure adherence to stated rulebooks and to align to the evolving expectations of sophisticated local regulators such as VARA.

1. Dubai’s VARA: An evolving rulebook for regulated VASPs

VARA, established in February 2022, is the world’s first independent regulator dedicated solely to virtual assets.^[18]  VARA has already licensed multiple Virtual Asset Service Providers (VASPs), including Binance FZE, Laser Digital Middle East FZE, OKX Middle East Fintech FZE, Crypto.com, BitOasis Technologies FZE, Deribit FZE, Bitpanda Broker MENA DMCC and CoinMENA FZA, and Ctrl Alt.

On 19 May 2025, VARA issued a Version 2.0 of its activity-based rulebooks. ^[19] The revised framework enhances oversight across eight core virtual asset activities, including advisory, brokerage, custody, exchange, lending and borrowing, management, transfer and settlement, and issuance services. Key updates include stricter controls around margin trading and token distribution services, and clarifications for collateral wallet arrangements.

On 31 August 2024, the Dubai VARA also issued the "Regulations on the Marketing of Virtual Assets and Related Activities 2024" to establish a comprehensive framework governing the promotion of virtual assets within Dubai, effective from 1 October 2024, and carrying significant penalties of up to AED 10 million per violation. ^[20] The new framework introduces detailed compliance obligations for all entities-domestic or foreign-that advertise virtual assets or related services in or targeting the UAE; these obligations apply regardless of whether the entity is licensed by VARA. The new rules also strictly prohibit marketing or conducting virtual asset activities involving “Anonymity-Enhanced Cryptocurrencies” (commonly known as privacy coins) – i.e. assets that obscure transaction ownership and lack traceability mechanisms.

2. Abu Dhabi: Institutional focus within the ADGM

ADGM, the finance-focused free zone of the emirate of Abu Dhabi, has regulated crypto asset activities since June 2018. ^[21] Most recently updated in June 2025, the Guidance on the Regulation of Virtual Assets Activities in ADGM provides a comprehensive and risk-sensitive approach to regulating digital assets. ^[22] 

The FSRA requires any entity wishing to conduct virtual asset activities within ADGM to obtain a Financial Services Permission (FSP), be subject to AML and counter terrorism financing (CTF) requirements, taking advice from FATF recommendations in its approach to risk-based principles like customer risk assessment and customer due diligence. Only individually approved “Accepted Virtual Assets” ^[23] may be used, subject to seven key factors: maturity, security, traceability, exchange connectivity, type of distributed ledger, innovation, and practical application. Virtual asset exchanges operating as Multilateral Trading Facilities (MTFs) must implement market surveillance and transaction recording mechanisms, bringing regulatory oversight on par with conventional financial markets.

The FSRA also introduced a new regulatory framework for the issuance of fiat-referenced tokens (FRTs) that came into effect on 5 December 2024. ^[24] The framework makes FRT (e.g., fiat-backed stablecoins) issuance a distinct Regulated Activity within ADGM's financial services regulatory regime.

In December 2024, Zodia Markets, backed by TradFi giants Standard Chartered, received regulatory approval to operate as a virtual asset brokerage in Abu Dhabi. ^[25] This expansion reflects the FSRA's strategy of anchoring its digital asset ecosystem around institutional grade players and aligns with ADGM’s broader commitment to establish itself as a regional hub for compliant and regulated virtual asset activity.

Conclusion

In this geopolitical contest for digital asset leadership, a government’s success will hinge on its ability to strike the balance between enabling growth and innovation while safeguarding consumer trust. For compliance officers, the competitive landscape demands active monitoring and strategic positioning. The US policy reversal creates immediate opportunities, but legislative processes remain unpredictable. While the UK aligns on its final policy considerations, the EU's MiCAR framework, despite implementation challenges, provides a comprehensive rulebook and is already reshaping global stablecoin markets. Meanwhile, Singapore and the UAE have established themselves as innovation-friendly alternatives with proven licensing pathways.  

For firms willing to venture into and/or expand their crypto reach, we suggest three immediate priorities: First, assess your company’s specific ambitions in these core markets and whether the opportunities presented can be effectively managed by existing processes or require significant uplift. The current environment poses constant pressure on compliance organisations to keep pace with product and business ambitions. Compliance officers should thoroughly understand the risks of any new opportunity and whether additional capabilities, internal controls or resources may be required. Second, engage actively in consultations were possible – especially in the UK and US – if not to influence outcomes, then to stay on top of the regulatory debate. Third, once operational, regularly review, test and enhance compliance programmes in the context of evolving regulations to maintain your regulatory and reputational standing. Regulated firms and their compliance programmes must be responsive to different requirements, especially those operating across multiple jurisdictions. These measures will not only minimize the institution’s risk exposure but help risk and compliance programmes scale and remain compliant in the face of emerging regulatory changes.

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Return to Part 1 of this article where we focused on three jurisdictions: the US and EU as the world's largest financial markets and the UK leveraging its historical role as a global financial hub.