Monetary Authority of Singapore (MAS)

The financial environment in Singapore has been evolving at a high rate during this decade. Globalization, fintech, digital assets, and cross-border capital flows demand a consistent but adaptable regulatory framework. The Monetary Authority of Singapore (MAS) was established to meet the regulatory requirements that are essential for a financial hub like Singapore.

The Monetary Authority of Singapore (MAS) is the central bank and the main financial regulator of Singapore. Common questions regarding the financial regulator of Singapore focus on how it establishes policy, what authority it possesses, and what its new programs are. This article attempts to address those questions in a clear and systematic manner.

What is MAS?

The Monetary Authority of Singapore (MAS) is the sole central bank and financial regulator in Singapore. It works under the mandates to monitor banking, payment, capital markets, insurance, and digital asset services. The authority also has a role in managing foreign reserves of Singapore, issuing currency, and acting as the banker and financial agent of the government. The watchdog is also responsible for overseeing  AML/CTF compliance by the businesses operating in its jurisdiction.

It was founded under the Monetary Authority of Singapore Act, 1970, and started its operations on 1 January 1971. Prior to October 2002, the country’s currency was issued by the Board of Commissioners of Currency, Singapore; this role was then merged with MAS.

Practically, the financial watchdog of Singapore regulates a set of statutes, including the Payment Services Act and other laws in the financial sector, to monitor the functioning of institutions in Singapore’s financial ecosystem.

What are the key roles of MAS?

MAS exists to maintain stability, integrity, and efficiency in Singapore’s monetary and financial systems. Its functions support economic planning, financial trust, and sector growth.

• Monetary & Exchange Rate Management

One of MAS’s primary objectives is to preserve price stability over the medium term. Instead of domestic interest rates, the regulator operates the exchange rate of the Singapore dollar to a basket of currencies and uses the exchange rate as its primary monetary policy tool.

The currency is allowed to fluctuate within a policy band. Depending on the economic conditions, MAS can change the slope (rate of appreciation/depreciation) of that band semi-annually.

This exchange-rate-based policy framework is considered suitable for Singapore’s small, highly open economy, where external trade and import prices play a disproportionate role in inflation.

• Regulation & Supervision of Financial Institutions

The authority regulates and oversees financial institutions such as banks, insurers, securities firms, payment service providers, and digital token service providers. It establishes standards in governance, capital adequacy, risk management, cybersecurity, audits, and conduct standards.

Licensing or registration regimes apply for various financial activities under statutes, including the Payment Services Act (PSA), which covers digital payment token services, money transfers, e-money issuance, and more.

MAS formulates the regulations for anti-money laundering and countering the financing of terrorism (AML/CFT). These regulations require relevant entities to perform customer due diligence, monitor transactions, keep records, and report suspicious activities. To ensure compliance, the Authority performs regulatory checks and audits. The authority also issues periodic guidelines to combat the latest money laundering threats.

• Reserve Management & Currency Issuance

The Monetary Authority of Singapore manages the country’s foreign reserves. The authority may also use the reserves to intervene in foreign exchange markets, if need be.

Since the merger of the Board of Commissioners of Currency in 2002 with MAS, the regulatory watchdog holds the exclusive right to issue Singapore banknotes and coins. 

The Monetary Authority is also involved in collaborative projects, research institutes, and partnerships to drive innovation in payments, asset tokenization, and fintech infrastructure. One high-profile initiative is the Singapore FinTech Festival (SFF), organized jointly by MAS, which brings together global stakeholders in financial technology.

Operational Framework & Key Principles of MAS

MAS’s policies and oversight are shaped by frameworks and principles that balance regulation with flexibility.

• Monetary Policy Process

MAS  Singapore updates its policy based on economic projections, inflation expectations, and global developments. The policy band for the Singapore dollar is reviewed semi-annually. The authority also publishes a Monetary Policy Statement (MPS) and Macroeconomic Review to explain its decisions to the government.

The Monetary watchdog has the power to intervene in foreign exchange markets by buying or selling currencies to keep the rate within the band. The exchange rate is treated as an intermediate target, with inflation control as the ultimate goal.

• Risk-Based Supervision

The Financial Watchdog intensifies its oversight in proportion to risk. More complex, systemic, or cross-border financial firms face strict regulatory requirements. Tasks like due diligence, internal controls, stress testing, and audit are scaled with the level of risk.

• Compliance & Enforcement

The Central Bank of Singapore established a dedicated enforcement department in 2016. MAS holds the power not only to issue regulatory directives but also to impose fines, revoke licenses, and conduct on-site audits. These are to ensure that firms comply with and maintain the ongoing standards.

Recent Developments & Trends

Financial regulation and markets evolve rapidly. MAS  has introduced changes to keep pace.

• Crypto, Digital Tokens & Payment Services

The Payment Services Act 2019 (PSA) establishes licensing and oversight for digital payment services, cross-border transfers, e-money issuance, and digital token services. Firms offering digital token services must register or obtain a license under PSA, aligning with MAS’s objectives of innovation plus consumer protection.

The Financial Watchdog has released enhanced guidance on due diligence for digital wealth and token operations to mitigate risks arising from crypto flows.

• Monetary Policy Adjustment

In January 2025, the Authority eased its monetary stance by slightly reducing the slope of the Singapore dollar’s appreciation band, the first such move since 2020. This adjustment came amid moderating core inflation and expectations of slower economic growth.

• Infrastructure & Payment System Consolidation

The Monetary Authority of Singapore (MAS) operates MEPS+, a real-time system that settles high-value interbank payments in Singapore dollars. To further strengthen the country’s payment infrastructure, MAS and the Association of Banks in Singapore (ABS) announced plans in 2025 to form a new entity that will manage national payment schemes such as PayNow, FAST, GIRO, and SGQR. This move is aimed at improving coordination, security, and innovation within Singapore’s payment ecosystem.

• Green Finance & Climate Initiatives

MAS has also started FAST-P (Financing Asia Transition Partnership), which aims at directing investments in sustainable infrastructure in the region. This will facilitate climate ambitions and will be in line with international sustainability pledges.

MAS also works with local partners to develop cross-border green finance and environmental, social, and governance capital flow structures.

Final Thoughts

The Monetary Authority of Singapore (MAS) is the central bank and integrated financial regulator of Singapore, which guarantees financial stability and good financial governance. MAS protects financial integrity and economic stability through its policy based on exchange rates, the management of the reserves, and the control of the banks, insurers, and payment systems. Its frameworks, such as the Payment Services Act and the AML/CFT regulations, facilitate compliance and adjust to the changing risks, such as digital assets and financial crime. Green finance, fintech innovation, and the modernization of payment infrastructure are recent efforts to ensure that the Monetary Authority of Singapore has a secure, efficient, and future-ready financial system.