Singapore Payment Service Provider Licence - Digital Payment Tokens
How does the Payment Service Act regulate DPTs?
The PS Act anticipated that DPTs facilities will include marketplaces that allow the buying and selling of DPTs that are not originally intended for the payments of goods and services but are capable of it. The determination of the DPT is in this case a tricky matter. For instance, a digital tokens offering for a token such as Cardano (a kind of digital token) may have been bought in by investors for capital appreciation / investment purposes while being sold off in a secondary market to other users of the token who can use the token to redeem cheap cleaning services.
Because of the complex correlations between the investment purposes of the token and the utility purposes of the token, DPTs often land in a grey area of regulatory application.
Fortunately, a framework has been provided for to ensure that DPTs are for the purposes set out under the PS Act. Digital payment token service providers (and applicants for such licence) are required to provide a legal opinion of their assessment for all DPTs, except Bitcoin, Bitcoin Cash, Bitcoin Gold, Bitcoin SV, Ethereum, Ethereum Classic, Litecoin and Ripple. The digital payment token service provider, through the legal opinion, has the burden of ensuring that the DPTs will be used by the customer primarily for payments / the redemption of goods and services.