MAS prepared to license ‘several’ DPT service providers

THE Monetary Authority of Singapore (MAS) has notified “several” providers of digital payment token (DPT) services that it is prepared to grant regulatory consent for them to operate in the city state.

Responding to queries after Australian crypto exchange Independent Reserve said on Tuesday that it has obtained the Singapore central bank’s “in principle approval” for the much-coveted payment services licence, an MAS spokesperson said: “MAS has recently notified several applicants that it is prepared to grant them payment services licences under the Payment Services Act (PSA). 

“Applicants who have received such notifications from MAS do not yet hold payment services licences. A licence will be subsequently granted to an applicant, provided it puts in place necessary measures to meet MAS’ requirements in order to operate as a licensee.”

MAS did not respond to BT’s queries on how many such applicants it had notified and who they are.

In a media statement on Tuesday, the eight-year-old Independent Reserve said it is one of the first virtual asset service providers to obtain an in-principle approval letter for the much-coveted licence.

On what an in-principle approval entails for the exchange, Independent Reserve’s Singapore managing director Raks Sondhi said: “While operationally, things will not change from receiving the in-principle approval, consumers will have the peace of mind that we and others that will receive their in-principle approvals have met MAS’s high standards.”

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Under the PSA which came into effect in January 2020, all providers of DPT services operating in Singapore, including crypto exchanges, must be registered and licensed. The Act gives the MAS supervisory authority over payment firms to ensure, among other things, that they are compliant with anti-money laundering (AML) and counter financing of terrorism (CFT) requirements.

However, no crypto licence has been granted to date, and DPT service providers have been operating with an exemption from holding a licence under the PSA. The exemption is in force until applications are approved or rejected by MAS, or withdrawn by the applicant.

To obtain the licence, virtual asset service providers had to put controls in place to ensure proper due diligence, suitable solicitation, and adequate risk disclosure. 

The MAS spokesperson said a number of DPT applicants have not met its standards in the area of money laundering and terrorism financing and technology risk controls.