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Monetary Authority of Singapore releases consultation on Digital Payment Token Services.

22 November 2022

The MAS (“Monetary Authority of Singapore”) seeks to develop an innovative and responsible digital asset ecosystem by protecting the public. To that effect, on 26 October 2022, the regulator issued two consultation papers, both closing by 21 December 2022.

These papers were:

  • Proposed Regulatory Measures for Digital Payment Token Services
  • Proposed Regulatory Approach for Stablecoin-Related Activities

Since 2017, MAS has consistently warned the public of the risk of cryptocurrencies speculations, however despite the high risks involved, crypto-assets continue to attract consumers. MAS in the consultation paper Proposed Regulatory Measures for Digital Payment Token Services sets out observations, policy consideration and proposed regulatory measures on Digital Payment Tokens Services Providers (“DPTSPs”).

Three key measures to address:

  • Consumers Access
  • Business conduct
  • Technology

Consumer Access Measures:

Scope of Consumer Access Measures

MAS proposes that DPTSPs apply consumer access measures to any customer who is:

  • Not an Accredited Investor[1] or institutional investor
  • Resident or Incorporated in Singapore.

Risk Awareness Assessment

DPTSPs should assess (using multiple choice tests) whether a retail customer has sufficient knowledge of the risks of DPT services before providing any DPT service to that customer.

  • Sharp fluctuations in the prices of DPTs and the loss of all monies put into DPTs
  • Inability to readily sell their DPTs, such as during illiquid market conditions or system outages.
  • Losing access to their DPTs in the event of a technological or operational issue, such as if private keys are lost or irretrievable
  • Losing their DPTs in the event of fraud, theft, sabotage, or cyber-attack

Restriction on Offering of Incentives

DPTSPs should not:

Provide to a retail customer any credit facility (fiat currencies or DPTs) to facilitate the retail customer’s purchase or continued holding of DPT

  • Enter into any leveraged DPT transaction with a retail customer
  • Accept any payments made by the retail customer using a credit card or charge card, in connection with the provision of any DPT service

Business Conduct Measures:

MAS proposes to introduce business conduct standards for DPTSPs in key areas of concern.

Segregation of Customers’ Assets and Risk Management Controls

DPTSPs should provide written disclosures to customers, which may include:

  • Terms and conditions
  • Customers’ assets being segregated from the DPTSP’s own assets and held for the benefit of the customers
  • Whether the customers’ assets will be commingled with the assets of other customers and, if so, the risks of such commingling
  • Consequences for the customers’ assets if the DPTSP becomes insolvent, and the arrangements by the DPTSP to protect customers’ assets

Measures to safeguard

private keys and storage of customers’ DPTs

Management of private keys associated with custodial wallets should be subject to strong controls over producers and staff


Identification and Mitigation of Conflicts of Interest

DPTSPs should:

  • Establish and implement effective policies and procedures to identify and address conflicts of interests
  • Disclose to their customers the general nature and sources of conflicts of interest and the steps taken to mitigate them
  • Prevent the misuse of such information of execute orders by employees

DPT trading platform operators should not:

  • Buy or sell DPTs for their own account; and
  • Permit their related corporations to buy or sell DPTs for their own account on the DPT trading platform

Disclosure of DPT Listing and Governance Policies

DPT listing and governance policies that address the following matters:

  • Criteria, due diligence, processes, and fees applied in making a DPT available for trading
  • Conditions under which DPTs may remain available for trading
  • Processes by which DPTs are removed from trading, and the rights available to customers
  • Settlement procedures of DPT transactions
  • Requirements to address unfair or disorderly trading practices

Complaints Handling

MAS proposes that DPTSPs have in place adequate policies and procedures to handle customer complaint

Managing Technology and Cyber

MAS requires Digital Payment Token Service Providers to:

  • Have effective Framework to identify critical systems
  • Ensure that the maximum unscheduled downtime for each critical systems does not exceed a total of 4 hours within any period of 12 months
  • Establish a recovery time objective of not more than 4 hours for each critical system.
  • Notify MAS as soon as possible, but not later than 1 hour, upon the discovery of a system malfunction or IT security incident
  • Implement IT controls to protect customer information from unauthorised access or disclosure

Market Integrity

MAS recognised the crypto market have been susceptible to unfair trading practice of market manipulation, misleading conduct, and insider trading by malicious actors. The regulator also considered the limitations to addressing market integrity risks from cross-border transactions. For this reason, MAS has provided examples of good and bad industry practices to provide guidance.


MAS intends to issue final guidelines taking into considerations the responses to the consultation papers and is considering providing a transition period of 6 to 9 months starting from the time of publication for DPTSPS to implement and comply with the guidelines.

How Apex can help

  • VASP / CASP Due diligence
  • Crypto/Virtual Asset/ VASP- CASP Licensing
  • Crypto AML & Compliance support
  • Crypto AML Business Risk Assessment (AML BRA)
  • Crypto Risk management
  • Crypto/ VA and blockchain Training


[1] individual that has S$2 million in net personal assets


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