There are many types of digital tokens and more are expected to emerge as businesses explore using the distributed ledger technology to create innovative solutions in the financial services and other sectors. The most prominent type of digital tokens is digital payment tokens (“DPTs“) that can be used to facilitate payment for goods and services, although these are also gaining popularity (and some regulatory recognition) as an investment asset class.
Before a person offers any digital token for sale in Singapore or any jurisdiction, one has to seek legal advice on the regulatory treatment accorded to the digital token in each of these jurisdictions with reference to the characteristics and nature of the digital token. In Singapore, the Monetary Authority of Singapore (MAS) looks at the characteristics and the risks associated with digital tokens in applying the appropriate regulatory framework to the products and not the mere labelling of such products.
In this Update, we highlight the applicable regulatory considerations in relation to DPTs that are gaining popularity among investors in Singapore and also include further comments on other types of digital tokens including security tokens and non-fungible tokens (NFTs) in Singapore
For more information, click here to read the full Legal Update.
