SINGAPORE – The trading of digital payment tokens (DPTs), commonly known as cryptocurrencies, is highly risky and not suitable for the general public, said the Monetary Authority of Singapore (MAS) as it issued a new set of guidelines for DPT service providers on Monday (Jan 17).

The guidelines, which take effect immediately, set out the central bank’s expectations in relation to the promotion of the trading of DPT services to the public.

MAS said DPT service providers should not engage in marketing or advertising their services in public areas in Singapore such as through advertisements on public transport, public transport venues, public websites, social media platforms, and broadcast and print media, or the provision of physical automated teller machines (ATMs).

They also should not engage third parties such as social media influencers to promote their services.

They can market or advertise only on their own corporate websites, mobile applications or official social media accounts.

MAS has observed that some DPT service providers have been actively promoting their services through online and physical advertisements or through the provision of ATMs in public areas, and this could encourage consumers to trade DPTs on impulse without fully understanding the attendant risks, the regulator said in a statement on Monday.

The risks include the prices of DPTs being subject to sharp speculative swings, MAS said.

Ms Loo Siew Yee, assistant managing director for policy, payments and financial crime at MAS, said: “MAS strongly encourages the development of blockchain technology and innovative application of crypto tokens in value-adding use cases.

“But the trading of cryptocurrencies is highly risky and not suitable for the general public. DPT service providers should therefore not portray the trading of DPTs in a manner that trivialises the high risks of trading in DPTs, nor engage in marketing activities that target the general public.”

DPT service providers include payment institutions, banks and other financial institutions, as well as applicants under the Payment Services Act (PS Act).

DPT services include the buying or selling of DPTs or facilitating the exchange of DPTs.

After amendments to the PS Act was passed on Jan 14, the definition of DPT services will be expanded to include the transfer of DPTs, provision of custodian wallet services for DPTs, and facilitating the exchange of DPTs without possession of monies or DPTs by the DPT service provider.

To date, MAS has granted four licences to provide DPT services out of a pool of 170 applications.

The anointed quartet are Singapore-based fintech firm Fomo Pay, cryptocurrency payments provider Triple A, Australian cryptocurrency exchange Independent Reserve, and DBS Bank’s brokerage arm DBS Vickers.

Other entities have also received in-principle approval from MAS.

Source: https://www.straitstimes.com/business/companies-markets/crypto-trading-should-not-be-promoted-to-the-public-under-new-mas-guidelines