The Monetary Authority of Singapore (MAS) has released its final set of regulations to enhance the oversight of Digital Payment Token (DPT) services, following up on its initial legislative amendments in July 2023.
MAS said in a statement that 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.
The MAS’s comprehensive framework encompasses several key areas. In terms of business conduct, DPT service providers are now required to maintain a high level of transparency. This includes the disclosure of potential or actual conflicts of interest, the establishment of clear criteria for the listing of digital tokens, and the development of robust procedures for addressing customer complaints and resolving disputes.
Consumer protection measures have also been a focal point in the new regulations. DPT service providers are expected to evaluate the risk awareness of their customers regarding cryptocurrency transactions.
MAS advises against incentivizing cryptocurrency trading and has imposed restrictions on certain practices, such as providing financing or leverage for such transactions.
Moreover, the use of locally issued credit cards for purchasing cryptocurrencies is now prohibited, and there is a limit on the value of cryptocurrencies that can be considered in a customer’s net worth assessment.
Regarding technology and cybersecurity, the MAS has aligned the requirements for DPT service providers with those of traditional financial institutions.
This entails ensuring the high availability and recoverability of critical systems, thereby mitigating technology and cyber risks.
These regulations and guidelines will be progressively implemented starting from mid-2024, giving DPT service providers ample time to adapt and comply.
Ho Hern Shin, Deputy Managing Director (Financial Supervision) of MAS, stressed the responsibility of DPT service providers in protecting consumer interests.
She pointed out the speculative and high-risk nature of cryptocurrency trading and advised consumers to exercise caution, especially with unregulated entities, including those based overseas.