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  • L Higgins and M Bacina

Singapore slings new guidance to protect consumers


The Monetary Authority of Singapore (MAS) has released its final tranche of responses to feedback received on its proposed regulations for Digital Payment Token (DPT) service providers in Singapore.


The proposals seek to "discourage cryptocurrency speculation by retail customers", in effect seeking to protect customers from spilling their wealth, in particular by:

  1. requiring customer's to pass a risk awareness assessment before accessing DPT services;

  2. refusing to offer any incentives to trade in cryptocurrencies;

  3. refusing to offer financing, margin or leverage transactions for DPT services;

  4. refusing to accept locally issued credit card payments; and

  5. limiting the value of cryptocurrencies in determining a customer's net worth (which is relevant to determining whether a customer passes the SGD$2M "accredited investor" test, similar to Australia's "sophisticated investor" exemption to certain disclosure and reporting requirements).

The recent announcement and guidance release represents part two of Singapore's responses to feedback received on its proposed regulations. The first part, released in July 2023, required providers to deposit customer assets under a statutory trust before the end of the year for safekeeping.


The measures also include service system availability and recoverability requirements for DPT service providers, in line with the current requirements imposed on systemically important financial institutions, but not payment service providers, meaning this is a special carve out specifically for cryptocurrency.


The release is not without controversy. Regulation that protects consumers without stifling innovation remains a Herculean task, especially with the inherent complexities of blockchain technology and fears arising from a lack of understanding. Posts on X expressed disappointment with the news, lamenting that the proposed new regulations fail to strike the appropriate balance, like a bouncer preventing the entry to the bar:

Although Singapore has recently been raising a glass to the pro-innovation movements with forward-thinking legislative and regulatory developments (see the recent High Court decision recognising crypto as property and the new stablecoin framework), the jurisdiction remains cautious of the industry, one might say nursing the cup of innovation rather than draining it and going for a refill. Ho Hern Shin, Deputy Managing Director (Financial Supervision) of the MAS, said:

DPT service providers have the obligation to safeguard the interests of consumers who interact with their platforms and use their services. While the 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, include those based overseas.

The rules are set to be implemented in small sips starting from the middle of next year to provide an "adequate transitional period" for their enforceability.


Singapore's cheers to the potential of blockchain is evident in the tailored provisions for cryptocurrency, differentiating them from traditional financial entities. As Singapore continues to navigate the evolving landscape and continue to fill their innovation cup (we can do this all day), the global community watches on, while they also consider the difficult balance of mixing both safeguards for consumers and embracing innovation and aiming for just the right balance of a refreshing draught of innovation with coasters to safely catch any spills.


By Michael Bacina and Luke Higgins.

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