Singapore’s Monetary Authority Strengthens Regulations to Safeguard Digital Payment Token Users
The Monetary Authority of Singapore (MAS) has announced new requirements for Digital Payment Token (DPT) service providers, aimed at enhancing the safety of customer assets and protecting investors. These measures include the establishment of a statutory trust to safeguard customer assets and restrictions on lending and staking activities for retail customers.
The move follows a public consultation conducted in October 2022, which received significant interest and support from a wide range of respondents. Key measures supported by the industry include segregating customer assets from those of the service providers, daily reconciliation of assets, and clear disclosures of risks associated with having assets held by DPT service providers.
To implement these requirements, MAS is seeking public feedback on draft legislative amendments to the Payment Services Regulations. Additionally, guidelines will be published to ensure consistent implementation within the industry.
MAS also intends to restrict DPT service providers from facilitating lending and staking activities for retail customers, as these activities are deemed unsuitable for the general public. However, such activities may still be allowed for institutional and accredited investors. Diverse views were received on this proposal, with some suggesting the option of offering these activities with customer consent and risk disclosures. MAS will continue to monitor market developments and consumer risk awareness to ensure the appropriateness of these measures.