Crypto Assets

Singapore: Regulatory Measures for Digital Payment Token Services

Latest Developments

On 3 July 2023, the Monetary Authority of Singapore (MAS) published its decision on new investor protection measures for digital payment token (DPT) services. This followed a public consultation that MAS held in end-2022.

From 3 July 2023 to 3 August 2023, MAS also held public consultations on: (1) proposed legislative amendments to the Payment Services Regulations 2019 to implement the new investor protection measures; and (2) additional proposed measures to address market integrity in DPT services.


DPT service providers are required to be licensed by MAS under the Payment Services Act 2019. A DPT service refers to any service of dealing in DPTs (i.e. buying or selling DPTs in exchange for money or other DPTs) or any service of facilitating the exchange of DPTs.

On 3 July 2023, MAS published its decision on introducing investor protection measures for DPT services, which include requiring DPT service providers to comply with the following:

  • Ensure that customers’ assets are properly segregated from DPT service providers’ own assets and held on trust for the benefit of customers. This includes keeping customers’ assets on a separate set of blockchain addresses from those containing DPT service providers’ own assets;

  • Safeguard customers’ moneys by (i) obtaining an undertaking from a safeguarding institution; (ii) obtaining a guarantee given by a safeguarding institution; or (iii) depositing moneys in a trust account maintained with a safeguarding institution. Customer moneys will need to be safeguarded with a prescribed financial institution in Singapore;

  • Conduct daily reconciliation of customers’ assets and keep proper books and records;

  • Maintain access and operational controls to customers’ DPTs in Singapore;

  • Maintain a separate custody function that is operationally independent from other business units. For now, MAS has decided not to require the use of independent third-party custodians for customer assets;

  • Provide clear disclosures to customers on the risks involved in having their assets held by the DPT service provider; and

  • DPT service providers will be restricted from facilitating lending or staking of their retail customers’ DPTs, as MAS is of the view that these activities are generally not suitable for the retail public. DPT service providers may continue to facilitate such activities for their institutional and accredited investors.

In order to address market integrity risks, MAS has proposed requiring DPT service providers to:

  • Maintain adequate systems, processes, controls, human resources, and governance arrangements, in a manner that is commensurate with the nature, scale and complexity of their business, to: (i) handle and execute customers’ orders in a fair, orderly and timely manner, and (ii) prevent and detect unfair trading practices; and

  • DPT service providers that operate a trading platform should ensure that the operation of the platform is fair, orderly, and transparent.

MAS has also proposed to introduce prohibitions against unfair trading practices in the DPT market similar to those currently found in the capital markets, by adopting existing legislative provisions with necessary modifications relating to:

  • False trading and market rigging;
  • Market manipulation;
  • False or misleading statements;
  • Fraudulently inducing persons to deal;
  • Employment of manipulative and deceptive devices;
  • Bucketing (i.e. where a person knowingly executes, or holds himself/herself out as having executed, an order to make a purchase or sale of a DPT, without having effected in good faith a purchase or sale in accordance with the order);
  • Cornering (i.e. directly or indirectly cornering or attempting to corner any DPT);
  • Dissemination of information about illegal transactions; and
  • Insider trading.

How could it be relevant for you?

DPT service providers will need to comply with the new requirements when they are implemented and brought into force. DPT service providers should therefore note the new requirements and be prepared to comply.

Next Steps

MAS recently held public consultations on: (1) proposed legislative amendments to the Payment Services Regulations 2019 to implement the new investor protection measures, as well as (2) proposed measures to address market integrity risks and prohibitions against unfair trading practices in the DPT markets. The public consultations closed on 3 August 2023.

MAS can be expected to review comments received before issuing its decision on relevant legislative amendments and additional regulatory measures. DPT service providers should continue to monitor this space for further developments.

*Information is accurate up to 27 November 2023

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