The Monetary Authority of Singapore (MAS) today published its final tranche of responses to feedback received on its proposed regulations for Digital Payment Token (DPT) service providers in Singapore.
The consulted proposals detail business conduct and consumer access measures to limit potential consumer harm. It also stipulates minimum technology and cyber risk management requirements for DPT service providers.
With regard to business conduct, MAS will issue guidance for DPT service providers to implement these measures, which received broad support from a wide range of respondents:
- Identify, mitigate and clearly disclose potential and actual conflicts of interest;
- Publish policies, procedures and criteria that govern the listing of a DPT; and
- Establish effective policies and procedures to handle customer complaints and resolve disputes.
Regarding consumer access measures, DPT service providers should discourage cryptocurrency speculation by retail customers by:
- Determining a customer’s risk awareness to access DPT services;
- Not offering any incentives to trade in cryptocurrencies;
- Not providing financing, margin or leverage transactions;
- Not accepting locally issued credit card payments; and
- Limiting 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 maintain high availability and recoverability of their critical systems, in line with current requirements imposed on financial institutions.
MAS’ regulatory measures on DPT services will be implemented through regulations and guidelines, which will take effect in phases from mid-2024. This will provide an adequate transitional period for DPT service providers to properly implement these measures.
Ms Ho Hern Shin, Deputy Managing Director (Financial Supervision), 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.”