Singapore Central Bank Issues Final Guidelines for Crypto Payment Providers

• Singapore central bank, the Monetary Authority of Singapore (MAS), has issued final guidelines for crypto payment providers, detailing measures related to consumer access.
• MAS mandates that retail investors must pass a risk awareness assessment before investing.
• Singapore-based crypto exchange DigiFT has received key regulatory approvals from MAS, becoming the first exchange with an AMM.

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The Monetary Authority of Singapore (MAS) has published the final part of its consultation response on conduct and consumer protection obligations for crypto businesses. The report provides central bank feedback on a paper on a crypto regulatory framework. 

On Dec. 5, Chainalysis reported that the Singapore central bank released a report detailing its responses on crypto regulations for digital asset businesses in the country. 

1/6 🇸🇬 The Monetary Authority of Singapore published the second and final part of its consultation response on conduct and consumer protection obligations for #digitalasset businesses, or DPTSPs. Key takeaways in the 🧵:

— Chainalysis (@chainalysis) December 5, 2023

Singapore Clarifies Cryptocurrency Regulations 

In October 2022, MAS issued a consultation paper proposing regulatory measures for what it called digital payment token service providers (DPTSPs).

The response covers measures relating to consumer access, business conduct, managing technology, cyber risks, and implementation timelines.

MAS stated that all retail investors must pass a risk awareness assessment before investing. Additionally, DPTSPs are not permitted to offer incentives to attract retail investors.

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The companies will not offer debt-financed or leveraged crypto transactions to retail traders.

Crypto payment firms should not trade on their own platforms and need to segregate activities such as market making and acting as a broker. 

Moreover, crypto firms must identify and mitigate conflicts of interest appropriately and disclose token listing and governance policies to clients.

Additionally, DPTSPs can list self-issued tokens, but they must disclose the appropriate information to customers.

Companies must also provide high systems availability, recoverability, and incident reporting. Controls to protect user information must also be implemented, the MAS stated. 

The central bank stated that it will mandate these requirements in early 2024 with a nine-month transition period for implementation.

DigiFT Gets Regulatory Approval 

In related news, Singapore-based crypto exchange DigiFT has received key regulatory approvals from the MAS.

DigiFT was granted a Capital Markets Services (CMS) license on Dec. 5 and a Recognised Market Operator (RMO) license on Dec. 1.

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Moreover, it is the first exchange with an automatic market-making (AMM) mechanism to go through MAS’ fintech sandbox and receive full licenses. DigiFT CEO Henry Zhang explained: 

“The MAS admits innovative business models to their regulatory sandbox to observe such models within a controlled environment, and one needs to graduate from the sandbox in order to receive full licenses.” 

Moreover, DigiFT will offer secondary trading of security tokens backed by real-world assets (RWA).

Fintech firm Ripple and Stablecoin issuer Circle were granted a Singapore Payment Institution License in June.