On Thursday, the Monetary Authority of Singapore (MAS) published its final segment of responses to feedback on the proposed regulations for digital payment token (DPT) service providers. These proposals have consumer protection at the forefront.
New MAS regulations on digital payment tokens exclude crypto trading
As such, it sets out the minimum requirements for technology and cyber risk management that DPT service providers have to comply with. To mitigate risks, Singapore’s financial watchdog recommends the DPT platforms discourage retail speculation in cryptocurrencies.
The proposed consumer access measures determine that DPT service providers should be responsible for determining a customer’s understanding of the risks associated with DPT services. Apart from this, platforms must also avoid incentivising cryptocurrency trades and not provide cryptocurrency financing, margins, or leverage.
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Additionally, consumers cannot use their local credit cards to pay for any cryptocurrency trades, and DPT platforms and must limit crypto values to determine customer net worth. The MAS Deputy Managing Director (Financial Supervision), Ms Ho Hern Shin, backed these guidelines and said:
DPT service providers have the obligation to safeguard the interests of consumers who interact with their platforms and use their services. 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.
The MAS indicated these new regulations will come into force in phases from mid-2024 onwards. It feels this gives DPT service providers enough time to shape up their policies and procedures in the interim.
