The Monetary Authority of Singapore (MAS) reinforces regulations for Digital Payment Token (DPT) service providers to enhance consumer protection and cybersecurity.
Singapore, 23 November 2023 – The Monetary Authority of Singapore (MAS) unveiled the final set of responses to public feedback on its proposed regulatory framework for Digital Payment Token (DPT) service providers in the country. The proposed regulations aim to establish stringent measures ensuring the responsible conduct of businesses in the digital payment token space.
The consulted proposals address various aspects, including business conduct, consumer access, and technology risk management. In terms of business conduct, MAS will guide DPT service providers to identify and disclose conflicts of interest, establish clear policies for listing DPTs, and implement effective procedures for handling customer complaints and dispute resolution.
For consumer access measures, DPT service providers are directed to discourage cryptocurrency speculation by assessing customers’ risk awareness, refraining from offering incentives for cryptocurrency trading, and avoiding financing, margin, or leverage transactions. Additionally, these providers are prohibited from accepting locally issued credit card payments and are required to limit the value of cryptocurrencies in determining a customer’s net worth.
In the realm of technology and cyber risk, MAS mandates DPT service providers to maintain high availability and recoverability of critical systems, aligning with existing requirements for financial institutions.
The regulatory measures are set to be implemented through phased regulations and guidelines, starting from mid-2024. This approach allows DPT service providers a transitional period to ensure proper implementation of the specified measures.
Ms. Ho Hern Shin, Deputy Managing Director (Financial Supervision) at MAS, emphasized the obligation of DPT service providers to safeguard consumer interests. While the introduced measures aim to enhance consumer protection, she highlighted the inherent speculative and risky nature of cryptocurrency trading. Consumers are urged to exercise caution, remain vigilant, and avoid dealings with unregulated entities, including those based overseas.
The regulatory efforts follow MAS’s earlier publication of consultation responses and proposed legislative amendments in July 2023, addressing customer asset segregation and custody requirements.
Source – MAS
