MAS amends crypto custody rules and expands digital asset oversight

MAS amended the Payment Services Act to include three additional service types and new guidelines for digital asset custody. Existing providers must notify MAS within 30 days regarding transitional arrangements because the regulator is expanding its oversight to include digital asset custody and three additional service types under the amended Payment Services Act. In October, DBS Vickers became the first bank-backed brokerage to receive formal approval from the Monetary Authority of Singapore under the Payment Services Act 2019 to provide digital payment token services as a Major Payment Institution. This expansion follows the August transition of the DBS Digital Exchange to 24/7 operations. DDEx recorded trading volumes in the two full months since the August transition that were 40% higher than the volume of the first eight months of the year. Eng-Kwok Seat Moey, Group Head of Capital Markets and Chair of the DBS Digital Exchange, said the platform helps customers capture value while staying true to tenets of safety and security. I think the sudden tripling of custody assets to over SGD 600 million in late October is an aggressive spike that suggests concentrated risk.

DDEx growth and products

DDEx has onboarded over 500 participants including banks, a Central Bank, and other digital asset exchanges. These participants gain round-the-clock access to market makers on the platform and can tap on the bank’s digital asset custody services. Digital asset exchanges also use the bank’s API solutions to provide payments and collections for their own customers. The platform enables corporate and institutional investors, accredited individuals, and family offices to access an integrated suite of solutions. Since its launch in December 2020, DDEx has seen active trading clients grow by 36%. You likely already know that these institutions drive the bulk of the volume. Trading value in the first five months of this year in Singapore dollar terms nearly tripled compared to the same period in 2023. In June, the exchange listed its inaugural Security Token Offering in the form of an SGD 15 million digital bond. DBS is also studying ETH staking as a service and the listing of stablecoins to meet the requirements of professional investors.

The increase in digital assets under custody at DBS reached over 80% in Singapore dollar terms. In May, DBS Private Bank rolled out an Asia-first bank-backed trust solution for cryptocurrencies. The platform allows clients to manage digital asset and traditional portfolios side-by-side. I think the massive growth in the volume of assets held by a single bank indicates a high level of centralization in the regional market.

Regional market trends

The Gemini and Glassnode 2025 crypto trends report shows that retail Bitcoin trading in the Asia-Pacific region grew 6.4% year-on-year in January 2025. This data excludes trading through exchanges and excludes exchange-traded fund flows. This growth occurred while Bitcoin trading in the US fell 5.7% and European Union trading dipped 0.7%. The 5.7% decline in Bitcoin supply growth suggests that while big investors are optimistic, retail investors may take a more cautious approach. Mr Saad Ahmed, head of Gemini’s Asia-Pacific business, said that the data excludes ETF trading, which is a primary driver of demand in the US.

Solana emerged as one of the fastest-growing digital asset ecosystems, outperforming Bitcoin and Ether on 344 out of 727 trading days since the industry low in November 2022. The report found that while major digital assets such as Bitcoin, Ether and Solana recorded a significant rise in capital inflows in 2024, Solana has emerged as one of the fastest-growing digital asset ecosystems. In January 2025, US President Donald Trump ordered a cryptocurrency working group to propose new regulations and explore a national cryptocurrency stockpile. How will these regional regulatory certainties affect the global distribution of liquidity?