SINGAPORE, DURASI.co.id – The Monetary Authority of Singapore (MAS) will introduce a slew of measures to tighten regulations for digital payment token (DPT), or cryptocurrency, service providers in Singapore, including the prohibition of payments via locally issued credit cards.
The authority on Thursday (Nov 23) announced its final set of responses to feedback received on its proposed regulations, which detail business conduct and consumer access measures to “limit potential consumer harm”.
The proposals also stipulate minimum technology and cyber risk management requirements for DPT service providers.
MAS first proposed measures to protect customers from the risks of cryptocurrency trading in October 2022. It covered three areas: Consumer access, business conduct and technology risks.
It published the first tranche of consultation responses and proposed legislative amendments in July, focusing on the requirements for segregation and custody of customers’ assets.
The finalised measures will be implemented in phases from mid-2024.
Under the rules set out on Thursday, service providers are not to accept payments by locally issued credit cards or charge cards.
MAS said that while credit cards are seen as a convenient method of payment, they would also allow retail customers easy access to debt financing, running counter to its policy intent to restrict purchases of cryptocurrencies on credit.
Service providers should also discourage retail customers from cryptocurrency speculation by not offering any incentives to trade in cryptocurrencies, said MAS.
A retail customer refers to a customer who is not an accredited investor or institutional investor.
“Retail customers often do not have a full picture of the associated risks and may lack the financial resources to withstand the large losses that are typical in cryptocurrency markets,” MAS said.
Additionally, service providers must not provide financing, margin or leverage transactions. They must also limit the value of cryptocurrencies in determining a customer’s net worth.
Crypto service providers must also determine a customer’s risk awareness to access their services.
Service providers must treat all customers as retail customers by default, with the exception of institutional investors.
Only accredited investors, currently defined as someone with at least S$2 million in net personal assets, are exempted from the rules. Crypto assets can form part of this S$2 million, but no more than 50 per cent of the value of a person’s crypto holdings can be used, or up to S$200,000, whichever is lower.
MAS also laid out business conduct rules for crypto service providers. They have to identify, mitigate and clearly disclose potential and actual conflicts of interest, as well as publish policies, procedures and criteria that govern the listing of a DPT.
They must also establish effective policies and procedures to handle customer complaints and resolve disputes.
Regarding technology and cyber risk, MAS will require DPT service providers to maintain high availability and recoverability of their critical systems, in line with current requirements imposed on financial institutions.
“DPT service providers have the obligation to safeguard the interests of consumers who interact with their platforms and use their services,” said Ms Ho Hern Shin, MAS’ Deputy Managing Director (Financial Supervision).
“While these 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, including those based overseas.”
Source: CNA/ga(ac)
