Singapore Delays Update to Crypto Rules for Banks Until 2027

Core Points - The Monetary Authority of Singapore (MAS) has postponed the implementation of new crypto prudential standards to 2027, delaying the original target of January 1, 2026, due to industry concerns [1][2] - The updated rules will require banks to hold capital reserves against their crypto exposures based on risk classification, aligning with Basel Committee standards [2][6] - Higher capital requirements will be imposed on cryptoassets deemed higher risk, while stable assets backed by eligible reserves may receive more favorable treatment [3][6] Industry Context - Singapore has been proactive in establishing a regulatory framework for digital assets, with initial rules implemented in 2020, aiming to balance innovation and financial stability [3] - As of April this year, approximately 26% of Singaporeans owned some form of cryptocurrency, and web3 investments represented 64% of total fintech funding in 2024, amounting to US$742 million [4] - Institutional interest in crypto is increasing, with 57% of local investors planning to boost their crypto allocations [4] Banking Sector Developments - Local banks are adapting to the delayed rules, with DBS launching tokenized structured notes on Ethereum and other banks exploring asset tokenization and stablecoin integration [5] - The changes aim to clarify how banks account for cryptoassets within their capital, liquidity, and large exposure frameworks, effectively integrating crypto exposures into existing prudential standards [6]