SINGAPORE Trends and Developments Contributed by: Adrian Ang, Alexander Fong and Benjamin Samynathan, Allen & Gledhill LLP
other stablecoins that may not meet these strin - gent requirements under the new framework. As may be noted from the above, the primary thrust of these requirements relates to consumer protection and solvency, and are geared towards ensuring that consumers are able to realise the value of their SCS holdings at short notice and with some degree of certainty. Increased Focus on Consumer Protection The proposed stablecoin regulatory framework above dovetails with the broader push toward greater consumer protection. Indeed, the broad - er regulatory climate in Singapore has shifted away from DPT “trading” activity in and of itself, and more toward encouraging real commercial use-cases for blockchain technology. Under its Guidelines on Provision of DPT Ser - vices to the Public, MAS has stated its view that: “[…] the trading of [DPTs] is highly risky and not suitable for the general public. The public should not be encouraged to engage in the trading of DPTs” . What is also telling of the regulator’s position in Singapore is the title of an address provided by then-Managing Director of MAS, Ravi Menon, at a seminar in August 2022 “Yes to Digital Asset Innovation, No to Cryptocurrency Speculation” . Accordingly, in recent years, there has been a greater regulatory push in Singapore toward consumer protection measures; in particular, measures to mitigate the risks of insolvency on the part of DPT service providers. With effect from 4 October 2024, a new slate of consumer protection measures specific to DPT service providers took effect, with a second tranche of measures to come into force in June 2025.
The key consumer protection requirement is the requirement to ensure, no later than the next business day after a DPT service provider receives customer DPT, that such DPT is either deposited in “trust account” or returned to the customer. That “trust account” must be des- ignated as such (or as a customer’s account distinguishable from the DPT service provider’s own accounts), and the customer DPTs therein should be subject to stringent requirements. Dis - closures must also be made to the customers on how their DPTs are being safeguarded, and what the risks and consequences are in the event of an insolvency. Other requirements that came into force in October 2024 include the requirement to keep proper books and records, daily reconciliation of customer DPT, operational independence of the DPT safeguarding function, and other access and operational controls. From 19 June 2025, further consumer protec - tion requirements are slated to come into effect. These include the implementation of customer “risk awareness assessments” to assess whether retail customers have sufficient knowledge of the risks of such DPT services. It also includes restrictions on offering incentives (i) to “entice” retail customers to engage DPT services, or (ii) to any person (eg, existing customers or celeb - rities) to promote and/or refer DPT services to retail customers. DPT service providers will also be subject to certain further restrictions on pro - viding credit or leverage in relation to transac - tions, among further requirements on conflicts of interest, DPT listing and governance policies, and complaints handling.
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