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To quote Benjamin Franklin, and as we say in the Regulatory Compliance game, “time is money”. For a business (“Fintech”) that requires a license under the Payment Services Act, 2019 (the “PS Act”) today, if the Fintech had not commenced operations prior January 28, 2020, it cannot commence regulated activities until it has obtained a license. However, there are paths a Fintech can explore to accelerate its operations in Singapore. In this article, we discuss some of the available options1, including paths that will cease to be available once certain amendments to the PS Act (the “Pending Amendments”) become effective pursuant to the Payment Services (Amendment) Act.


The Standard Payment Institution Exemption pursuant to regulation 28 of the Payment Services Regulations (“Regulation 28”), a Fintech that conducts payment services (excluding businesses the provide digital payment token services or money-changing services) will be exempt from licensing under the PS Act (the “Standard Payment Institution Exemption”), subject to meeting the conditions set forth Regulation 28 for each activity. For example, if a Fintech carries on a business of providing a cross-border money transfer service, a license is not required if:

  • the business only involves transactions that are used as payment for goods or services that are funded from identifiable sources;
  • the Fintech complies with section 20(1) of the PS Act as if the person were a licensee; and
  • the Fintech would not otherwise be required to hold a major payment institution license;
    • The average monthly value of payment transactions accepted, processed or executed by the Fintech over a calendar year must not exceed S$3 million (or its equivalent in a foreign currency).

Utilizing the Standard Payment Institution Exemption, a Fintech could commence the provision of cross-border money transfer services immediately. The Standard Payment Institution Exemption is automatic and does not require the Fintech to make an application to the Monetary Authority of Singapore (“MAS”).

Custodial and Non-Custodial Business Models

Digital payment token custodians

The provision of custodian wallet services for Digital Payment Tokens (“DPTs”) will be a regulated activity upon the effectiveness of the Pending Amendments. Until the Pending Amendments go into effect, such a business model does not require licensing and a Fintech could commence the provision of custodian wallet services for digital payment tokens immediately, assuming it does not conduct an activity that the PS Act already regulates (such as “dealing in digital payment tokens” or “facilitating the exchange of digital payment tokens”, as such terms are defined in the PS Act).

Facilitating the exchange of DPTs without possession of moneys or DPTs by the DPT service provider

Operating an exchange without coming into possession of moneys or DPTs is not currently a regulated activity under the PS Act. However, it will be a regulated activity once the Pending Amendments go into effect. As a result, today a Fintech could commence the provision of such activities immediately. For example, earlier this year, DBS Digital Exchange Pte. Ltd. (“DDEX”) launched its exchange pursuant to which it offers (i) listing and trading of security tokens and (ii) trading in certain DPTs. Although DDEX is regulated as a recognized market operator with respect to its security token operations, its services relating to cryptocurrencies are not currently regulated under the PS Act.


We expect that Fintechs that are carrying on activities that will only be regulated when the Pending Amendments go into effect will be able to continue existing operations, similar to how companies were able to obtain an exemption from holding a license under the PS Act pursuant to the Payment Services (Exemption for Specified Period) Regulations 2019 (the “Specified Period Regulations”).

Payment Token Derivatives

The MAS has stated that it does not intend to regulate derivative contracts that reference payment tokens as underlying assets (“Payment Token Derivatives”) that are offered by entities that are not an “Approved Exchange”. As a result, a Fintech could potentially operate in Singapore immediately without a license. A Payment Token Derivatives business can potentially attract the same client interest as a standard exchange or OTC desk as it can give clients exposure to cryptocurrency assets. However, a Fintech that operates such a platform should carefully consider its business model prior to commencing operations. Among other things, the MAS has noted that Payment Token Derivatives are not suitable for retail investors.

Utility Tokens & NFTs

Not all digital tokens fall within the scope of regulated activity in Singapore. The current licensing regime extends only to tokens that meet the definition of a security token, digital payment token or e-money. Dealing in or facilitating the exchange of utility tokens and non-fungible tokens (“NFTs”)(not caught under the SFA or the PS Act) would not currently constitute regulated activity. Limiting the operating model to utility tokens and NFTs would, therefore, allow a Fintech to commence operations in Singapore without delay. Fintechs should be aware that the regulatory environment in this space is constantly evolving, and we would recommend conducting a token evaluation prior to commencing operations under this model. Fintechs should also consider “A Guide to Digital Token Offerings” published by the MAS.

Strategic Acquisitions

To jumpstart its operations in Singapore, a Fintech could potentially acquire a significant, majority or 100% interest in an entity that is exempt under the Specified Period Regulations (an “Exempt Entity”). While a new 20% controller of a company licensed under the Payment Services Act is required to obtain MAS approval prior to effecting the change of control, new controllers of Exempt Entities are not subject to this requirement. For illustration purposes, a Fintech with operations outside Singapore could acquire an interest in an Exempt Entity, rebrand the Exempt Entity under the Fintech’s international brand and thus commence operations in Singapore immediately. Of course, there is no assurance that the MAS would grant the Exempt Entity a license (regardless of the change of control) or that the exemption from licensing would continue for any specific period of time. In addition, such a transaction would be subject to risks that all acquisitions face. As a result, we would advise any Fintech considering such a strategy to proceed with caution and engage with the MAS in advance of completion of the transaction.


Many Fintechs are eager to operate in Singapore but have concerns about the uncertain timing for obtaining a license and launching operations. We believe there are potential solutions to these issues and enjoy working with our clients to achieve their desired results and timeline.

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