Singapore: MAS Issues Guidelines on Promoting Digital Payment Token Services

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The guidelines set out the MAS’ expectation that digital payment token service providers should not promote their services to the general public in Singapore.

On 17 January 2022, the Monetary Authority of Singapore (the MAS) issued new guidelines (the Guidelines) setting out restrictions on the promotion of services related to digital payment tokens (DPTs) in Singapore. The Guidelines apply to banks and financial institutions providing DPT services in Singapore, and entities providing DPT services in Singapore that have either been granted a licence under the Payment Services Act (PSA) or that are currently operating under transitional exemptions under the PSA (collectively, DPT service providers).

The Guidelines, which became effective immediately on the date of issue, emphasise that the MAS has consistently warned the Singapore public that trading of DPTs is highly risky. DPT service providers should conduct themselves with the understanding that trading of DPTs is not suitable for the general public in Singapore.

The following key changes were introduced.

  1. Prohibited promotions. DPT service providers should not trivialise the high risks of trading in DPTs, and should not promote their DPT services in public areas in Singapore or through any other media directed at the general public in Singapore.

DPT services providers are barred from placing any form of advertisements or promotional materials in public areas, such as Singapore public transport, public transport venues, broadcast media, or periodical publications (including newspapers and magazines), third-party websites, social media platforms, public events, or roadshows. Promotional banners or pop-ad advertisements on social media platforms targeting the general public or a specific consumer segment in Singapore are also prohibited.

DPT service providers should not engage third parties, such as social media influencers or third-party websites, to promote their DPT services to the general public in Singapore. This includes joint promotional campaigns with third parties to solicit new customers.

  1. ATMs in public areas. DPT service providers are prohibited from providing physical automated teller machines (ATMs) in public areas in Singapore, to facilitate public access to their DPT services. The MAS considers the provision of such in-person access to DPT services in public areas as a form of promotion of DPT services to the public.
  2. Payment token derivatives. The MAS set out specific restrictions in respect of payment token derivatives (PTDs), which are derivatives contracts that reference DPTs as underlying assets, such as contracts-for-differences and futures contracts.

DPT service providers should not promote PTDs to the public as a convenient unregulated alternative to trading in DPTs, or mislead the public that PTDs are less risky than DPTs.

Furthermore, PTD services may only be offered through a legal entity that is not licensed under the PSA, and the MAS expects PSA licensees to take all necessary steps to ensure that its customers do not confuse any PTD services associated with the licensee as being regulated by the MAS.

  1. Permissible promotions. DPT service providers may promote their services on their own corporate website, mobile applications, or official social media accounts, but must not trivialise the risks of trading in DPTs in a manner that is inconsistent with or contradicts the risk disclosures required under the PSA.

DPT service providers should carefully review the Guidelines and adjust their promotional activities if necessary. The MAS has noted that the DPT services landscape in Singapore is changing rapidly, therefore it may review and update the Guidelines at a later date.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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