Singapore bets SUSD 220 million on fintech just as the money dries up

Singapore has committed SUSD 220 million, or about USD 172.8 million, over three years to deepen its fintech base.

Deputy Prime Minister Gan Kim Yong, who also chairs the Monetary Authority of Singapore and holds the trade and industry portfolio, announced the sum on August 31.

It arrives under the fourth edition of the Financial Sector Technology and Innovation Scheme, known as FSTI 4.0, a programme first launched in 2015.

The timing is the story. Public money is going in precisely as private money is going out.

The sector looks healthy from a distance
By headcount and company count, Singapore’s fintech industry is in good shape. The city-state hosts more than 1,800 fintech firms employing close to 10,000 people. Gan put total fintech investment in 2025 at close to SUSD 3 billion and said the momentum would continue.

The industry has also matured commercially. Boston Consulting Group’s 2026 global fintech report found that worldwide fintech revenues passed USD 500 billion in 2025, growing 22% year on year, roughly four times the pace of incumbent financial firms.

Among the 85 largest listed fintechs, EBITDA margins rose four points to 20%, and 74% were profitable against 68% a year earlier. Asia-Pacific was the fastest-growing region at 25%.

Singapore’s own digital banks tell a similar story of grinding towards break-even. Trust Bank posted its first profitable month in March 2026, a little over three years after launch, with FY2025 income before operating expenses up around 39% to SUSD 135 million and its annual loss narrowing about 42% to SUSD 53.5 million.

Green Link Digital Bank has since claimed profitability from as far back as September 2024. Two of the five digital banks have now proved the model can work locally.

The funding picture is much harsher
KPMG’s Pulse of Fintech report for the first half of 2026, published three days before the MAS announcement, is sobering. Singapore’s fintech sector drew just over USD 499 million across 53 deals.

A year earlier the figure was roughly USD 1.45 billion across 97 deals. It is the weakest first half the country has recorded in close to a decade.

The shape of that number matters more than the number itself. A very quiet first quarter brought in about USD 88 million across 26 deals.

The second quarter rebounded to USD 411 million across 27 deals, but almost all of that recovery rested on one USD 320 million round for a cross-border payments platform in June. That single deal accounted for close to two thirds of the entire half.

Singapore is not alone. Asia-Pacific fintech investment fell to USD 4.6 billion across 350 deals, down from USD 7.1 billion in the second half of 2025.

Globally, though, investment rose to USD 103.1 billion, with the Americas taking more than 80% of it. Capital has not disappeared. It has moved west and concentrated in fewer, larger cheques for proven models.

What policy got right
Singapore’s advantages are real and were built deliberately. FSTI has backed more than 350 projects and helped establish over 30 centres of excellence since 2015.

Around it sits a stack of state-built plumbing, from PayNow and its bilateral links with Thailand’s PromptPay and Malaysia’s DuitNow, to Project Nexus, the multi-country instant payment corridor, to Project Guardian on asset tokenisation and the newer BLOOM initiative, under which Visa and Nium have been piloting stablecoin settlement outside business days.

The tax position helps too. Corporate income tax sits at 17% with exemptions that pull the effective rate lower, there is no capital gains tax, and digital payment tokens are exempt from GST.

In August, MAS also unveiled tax exemptions and talent measures aimed at fund managers. The regulator’s habit of publishing clear rules early, then enforcing them, has been the sector’s single biggest asset.

Where it hurts
That same enforcement instinct has cost Singapore something. On June 30 2025, MAS brought its Digital Token Service Provider regime into force under the Financial Services and Markets Act.

Firms incorporated in Singapore that served only overseas customers had to obtain a licence or cease the activity, with no grace period, no phased transition and penalties of up to SUSD 250,000 and three years in prison.

Several large exchanges publicly weighed moving staff to Dubai and Hong Kong. Licences remain scarce and hard to win.

Talent is the second pressure point, which is why an entire FSTI track is devoted to it. The third is early-stage capital.

Reports at the end of August that 500 Global would stop raising dedicated Southeast Asia funds underline how thin the seed and Series A layer has become in the region, even as Singapore captures the large majority of what money is still flowing.

What FSTI 4.0 is trying to buy
The scheme runs across six tracks covering institutional projects, manpower, AI adoption, shared infrastructure, centres of excellence and industry awards.

The headline number deserves care. FSTI 3.0 opened with SUSD 150 million in August 2023, but MAS added a further SUSD 100 million in July 2024 to fund a new quantum track and enhanced AI grants, taking that round to SUSD 250 million.

Measured against the opening commitment, SUSD 220 million is a clear increase. Measured against what FSTI 3.0 actually grew into, it is a reduction of roughly 12%.

MAS may well top up the new round in the same way, as it has done before. But on the figures announced this week, the regulator is not obviously spending more than last time.

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The institution track funds financial institutions and fintechs working on artificial intelligence, distributed ledger technology and quantum. A separate strand subsidises adoption of market-ready AI products listed on PathFin.ai, the MAS-led knowledge platform.

The shared infrastructure track is aimed squarely at firms that want modern capability without paying to build it alone. The centre of excellence track courts global companies willing to base research, product development and regional leadership functions in Singapore.

On talent, MAS will co-fund internship stipends with a target of at least 1,000 placements over three years, matched through a new portal run by the Singapore Fintech Association. A new scale-up grant will help Global Fintech Hackcelerator finalists validate products after the competition.

Past finalists have collectively raised SUSD 3.8 billion.

Notably, MAS has named no recipient companies. This is a sector-wide mechanism, not a bet on champions.

The Hong Kong question
Hong Kong has spent the same period winning the visible contests. In the Global Financial Centres Index published in March, Hong Kong held third place globally with a rating of 765, one point ahead of Singapore on 764, and ranked first worldwide for fintech offerings, where Singapore came fourth.

Hong Kong was the world’s top IPO venue by funds raised in the first quarter of 2026, with 40 listings raising about HKUSD 109.9 billion, up 488% year on year.

It has also overtaken Switzerland as the largest cross-border wealth hub, with USD 2.95 trillion booked in 2025.

Its digital asset push has been louder. The Stablecoins Ordinance, in force since August 2025, produced Hong Kong’s first licensed issuers in April 2026. But the detail is instructive.

Of 36 applications, exactly two were approved, HSBC and Anchorpoint Financial, a joint venture involving Standard Chartered, HKT and Animoca Brands.

Both parents are note-issuing banks. That is a 5.6% approval rate, and it suggests regulatory comfort counted for rather more than crypto pedigree.

Delivery has been slow as well. Anchorpoint’s HKDAP token only began a phased rollout on 12 August 2026, restricted to institutions and professional investors, with 522,000 tokens recorded in circulation as of August 19.

Retail access is not expected before the end of the year and HSBC’s own token is still pending. Hong Kong is not first in Asia here either. Japan licensed JPYC in August 2025 and the yen-pegged token went live that October.

Two models, one race
The models differ in kind, not just degree. Singapore runs a builder’s model. The regulator co-funds infrastructure, sets standards early, exports rails into ASEAN and treats the ecosystem as something to be engineered.

Hong Kong runs a gateway model, monetising proximity to mainland China, capital markets depth and wealth flows, and using tax deductions and innovation funds rather than sustained sector-wide grant programmes.

Both share the same weakness. An InvestHK ecosystem survey of 130 Hong Kong fintechs, published in 2025, found 58.8% naming talent scarcity as their top concern and 43.9% citing access to capital. Those are Singapore’s complaints too.

As of today, Hong Kong leads on the scoreboard and on capital markets momentum.

Singapore leads on ecosystem density, regional reach and regulatory predictability, and has more firms, more institutional plumbing and a clearer talent pipeline.

A single rating point separates them. FSTI 4.0 is Singapore’s answer to a rival that is currently winning on optics while facing the same structural squeeze underneath.