On January 17, 2022, the Monetary Authority of Singapore (MAS) issued the Guidelines on Provision of Digital Payment Token Services to the Public (Guidelines).
In Singapore, cryptocurrencies are generally regulated as digital payment tokens (DPTs) under the Payment Services Act 2019 (PSA). The PSA does not have a blanket prohibition on the trading of DPTs by the public in Singapore; however, any person who carries on a business of providing any DPT service is required to obtain a license. “DPT service” is defined to mean any service of dealing in DPTs or facilitating the exchange of DPTs.
The Guidelines apply to service providers that have been granted licenses to provide DPT services under the PSA as well as banks and other financial institutions providing DPT services in Singapore, among others (DPT service providers).
The Guidelines restrict the promotion of DPT services in public areas in Singapore or through any other media directed at the general public in Singapore. Such restrictions on DPT service providers include these:
- No placing of any form of advertisements or promotional materials in public areas such as Singapore public transport, public transport venues, broadcast media or periodical publications (e.g., newspapers and magazines), third-party websites, social media platforms, public events, or roadshows.
- No engagement of third parties, such as social media influencers or third-party websites, to promote their DPT services to the general public in Singapore.
- No provision of in-person access to DPT services in public areas through the use of automated teller machines.
- Requiring DPT service providers to promote their services only on their own corporate websites, mobile applications, or official social media accounts, provided that such promotion does not trivialize the risks of trading in DPTs or is inconsistent with or contradicts the risk disclosures that DPT service providers are required to make under the PSA.
- No promotion of payment token derivatives (i.e., derivatives contracts that reference DPTs as underlying assets) as a convenient, unregulated alternative to trading in DPTs or misleading the public that such derivatives are less risky than DPTs.
In summary, the Guidelines are an expression of MAS’s concern that DPT trading is highly risky and not suitable for the general public. While the Guidelines restrict the scope of promotional and marketing activities that DPT service providers can engage in vis-à-vis the retail public in Singapore, MAS has refrained from imposing a blanket prohibition on the trading of DPTs by the retail public in general.
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