The Monetary Authority of Singapore (MAS) has announced new requirements for Digital Payment Token (DPT) service providers to safekeeping customer assets under a statutory trust before the end of the year. This will mitigate the risk of loss or misuse of customers’ assets, and facilitate the recovery of customers’ assets in the event of a DPT service provider’s insolvency. MAS will also restrict DPT service providers from facilitating lending and staking of DPT tokens by their retail customers.
The public consultation received significant interest from a wide range of respondents, with broad support for DPT service providers to segregate customers’ assets from its own assets and held in trust, safeguard customers’ moneys, conduct daily reconciliation of customers’ assets and keep proper books and records, maintain access and operational controls to customers’ DPTs in Singapore, ensure that the custody function is operationally independent from other business units; and provide clear disclosures to customers on the risks involved in having their assets held by the DPT service provider.
MAS is now seeking public feedback on the draft legislative amendments to the Payment Services Regulations to put these requirements into effect.