Singapore’s MAS introduces stricter regulations for digital payment token services
The Monetary Authority of Singapore (MAS) has recently unveiled its comprehensive responses to the feedback on its proposed regulations for Digital Payment Token (DPT) service providers in Singapore.
These regulations are crucial in shaping the future of digital currencies in the country.
The proposed regulations primarily focus on business conduct and consumer access. They aim to mitigate potential consumer harm by setting minimum requirements for technology and cyber risk management among DPT service providers.
In terms of business conduct, MAS plans to issue detailed guidance for DPT service providers. These guidelines are broadly supported and include measures to:
Identify, mitigate, and disclose conflicts of interest.
Establish transparent policies for listing DPTs.
Develop effective procedures for handling customer complaints and resolving disputes.
Regarding consumer access, the MAS’s approach includes discouraging cryptocurrency speculation among retail customers. This involves assessing a customer’s risk awareness, refraining from incentivizing crypto trading, prohibiting financing and leverage transactions, not accepting locally issued credit card payments, and considering the value of cryptocurrencies in determining a customer’s net worth.
In the area of technology and cyber risk, MAS will require DPT service providers to ensure high availability and recoverability of their critical systems. This aligns with the current standards imposed on financial institutions, underlining the importance of robust infrastructure in the digital currency space.
The implementation of these regulatory measures will begin in mid-2024. This phased approach allows adequate time for DPT service providers to adapt and fully integrate these standards into their operations.
Ms Ho Hern Shin, Deputy Managing Director (Financial Supervision) at MAS, said, “DPT service providers have the obligation to safeguard the interests of consumers who interact with their platforms and use their services. While these business conduct and consumer access measures can help meet this objective, they cannot insulate customers from losses associated with the inherently speculative and highly risky nature of cryptocurrency trading.
“We urge consumers to remain vigilant and exercise utmost caution when dealing in DPT services, and to not deal with unregulated entities, including those based overseas.”