Singapore's Payment Services Act 2019 will come into force on 28 January and, consequently, anti-money-laundering measures will apply to all three classes of payment service provider (holders of money-changing licencees, standard payment institutions and major payment institutions). Private banks that perform these services are included.

Digital payment token (DPT) services are already classified as 'higher risk' in AML terms because the transactions they provide are anonymous, speedy and cross-border.

The Monetary Authority of Singapore, the city-state's all-in-one central bank, promotional agency and financial regulator, has laid out its proposals in this area. It is likely, after a brief period of consultation, to create rules to impose AML rules on:

• any service - perhaps acting as principal agent, perhaps not - to do with accepting digital payment tokens from one digital payment token address or account and giving them to another;
• any service that safeguards or administers a digital payment token over which the service provider has control
• any service that safeguards or administers a digital payment token instrument whereby the service provider has control over the token associated with that instrument; and
• any entity that induces anyone to sign an agreement with a view to buying or selling any digital payment tokens in exchange for any money or any other digital payment tokens.

On top of this, the regulator wants to acquire legal powers to impose "user protection measures" on certain DPT service providers and (by way of subsidiary legislation) "additional measures."

"User protection measures" might include:

• anti-co-mingling measures to require DPT service providers to segregate customers' assets from their own (one might have expected this to be de rigeur but that is not the case);
• the ring-fencing of customers' assets to protect them from claims from other creditors in the event of the licensee’s insolvency (this appears to be a blatant attempt to attract ICO business to Singapore); and
• the prescription of ways to maintain customers' and licensee’s assets, perhaps by a fixed percentage of assets in a cold wallet.  

Throughout its consultative document, the MAS writes as though its proposals are already enshrined in law. The outcome of the consultative process therefore seems a foregone conclusion.