MAS clarifies position on regulation of digital token service providers
MAS said it has set the bar 'high' for licensing, and will 'generally' not issue a licence. PHOTO: ST FILE
SINGAPORE - The Monetary Authority of Singapore (MAS) has clarified that digital token service providers offering services solely to customers outside Singapore - whether involving digital payment tokens or capital markets products - will need to be licensed from June 30.
The central bank added in its clarification on June 6 that it has set the bar 'high' for licensing, and will 'generally' not issue a licence.
'The money laundering risks are higher in such business models and if their substantive regulated activity is outside of Singapore, MAS is unable to effectively supervise such persons,' it said.
Without a licence, existing digital token service providers serving only overseas customers will be required to cease these activities when the regime comes into effect on June 30, said MAS.
In its May 30 response to feedback on a consultation paper regarding its proposed regulatory framework for digital token service providers, MAS noted that such providers may be more vulnerable to money laundering and terrorism financing risks due to the internet-based and cross-border nature of their services.
This increases the likelihood that they could be misused for illicit purposes, to the detriment of Singapore's reputation.
The proposed regulatory framework will come under the Financial Services and Markets Act 2022.
MAS also clarified that service providers for digital payment tokens or tokens of capital market products that serve customers in Singapore are already regulated, and there will be no change to what these licensed providers can do.
Providers serving customers in Singapore may also offer services to overseas clients, while those dealing with other types of tokens - such as utility or governance tokens - are not subject to licensing or regulation under the new regime and are therefore unaffected.
MAS said that it has reached out to persons who, based on information available to them, may be affected by the new regime to clarify its policy position and to discuss their plans for an 'orderly wind-down' of the activity.
It added that 'based on available information, we are aware of a very small number of such providers'.
Parties who may be affected by the digital token service regime may contact MAS at AMLCFT@mas.gov.sg.
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MAS clarifies position on regulation of digital token service providers
MAS said it has set the bar 'high' for licensing, and will 'generally' not issue a licence. PHOTO: ST FILE SINGAPORE - The Monetary Authority of Singapore (MAS) has clarified that digital token service providers offering services solely to customers outside Singapore - whether involving digital payment tokens or capital markets products - will need to be licensed from June 30. The central bank added in its clarification on June 6 that it has set the bar 'high' for licensing, and will 'generally' not issue a licence. 'The money laundering risks are higher in such business models and if their substantive regulated activity is outside of Singapore, MAS is unable to effectively supervise such persons,' it said. Without a licence, existing digital token service providers serving only overseas customers will be required to cease these activities when the regime comes into effect on June 30, said MAS. In its May 30 response to feedback on a consultation paper regarding its proposed regulatory framework for digital token service providers, MAS noted that such providers may be more vulnerable to money laundering and terrorism financing risks due to the internet-based and cross-border nature of their services. This increases the likelihood that they could be misused for illicit purposes, to the detriment of Singapore's reputation. The proposed regulatory framework will come under the Financial Services and Markets Act 2022. MAS also clarified that service providers for digital payment tokens or tokens of capital market products that serve customers in Singapore are already regulated, and there will be no change to what these licensed providers can do. Providers serving customers in Singapore may also offer services to overseas clients, while those dealing with other types of tokens - such as utility or governance tokens - are not subject to licensing or regulation under the new regime and are therefore unaffected. MAS said that it has reached out to persons who, based on information available to them, may be affected by the new regime to clarify its policy position and to discuss their plans for an 'orderly wind-down' of the activity. It added that 'based on available information, we are aware of a very small number of such providers'. Parties who may be affected by the digital token service regime may contact MAS at AMLCFT@ Join ST's Telegram channel and get the latest breaking news delivered to you.
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