QUESTION NO 1427

NOTICE PAPER 554 OF 2021

FOR WRITTEN ANSWER

Date: For Parliament Sitting on 26 July 2021

Name and Constituency of Member of Parliament

Mr Chua Kheng Wee Louis, MP, Sengkang GRC

Question:

To ask the Prime Minister (a) to date, what is the total number of digital payment token service provider applicants, with a breakdown by applications that are (i) withdrawn (ii) rejected and (iii) approved; (b) what is the number of entities currently exempted from holding a licence under the Payment Services Act for the provision of digital payment token services; and (c) what is the average duration of exemption to date.

Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:

1     The new Payment Services Act (“PS Act”) commenced on 28 January 2020.  As part of the transitional arrangements, entities that were engaged in regulated activities before the commencement of the Act were exempted from holding a licence if they submitted licence applications before the end of a specified grace period. The specified grace period for digital payment token (DPT) service providers ended in July 2020, six months after the commencement of the PS Act. The exemption remains in force until the applications are approved or rejected by the Monetary Authority of Singapore (MAS) or withdrawn by the applicant.

2     There are currently around 90 DPT service providers that operate under this exemption.  The list of entities that have been granted an exemption from holding a licence is available on the MAS website.

3     Since the commencement of the PS Act, MAS has received over 480 licence applications. Of these, around 170 applicants (or 35%) have applied to provide DPT services. To date, 30 DPT applications (or 18%) have been withdrawn after engagement with MAS and two have been rejected. Thus far, MAS has not issued any licence to DPT service providers, but several applications are in the final stages of review.

4     MAS closely scrutinises all applications and considers various factors.  These include the applicant’s understanding of risks relating to money laundering and financing of terrorism (“ML/TF”) and the technology risks posed by their business model, as well as the adequacy of controls instituted to mitigate such risks. We will reject applicants who fail to meet the required standards for ML/TF and technology risks set out in MAS’ regulations and notices.

5     MAS will continue to closely monitor the rapid developments in the DPT services sector, and will ensure that risks are effectively managed as part of the licensing and supervision process.

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