DBS Vickers, the brokerage arm of Singapore’s DBS Bank, today announced that it has received in-principle approval from the Monetary Authority of Singapore to provide digital payment token services in Singapore as a major payment institution under the Payment Services Act.
Fast facts
- DBS Vickers’ notification follows that of Australian cryptocurrency exchange Independent Reserve, reported last week, making it one of the first few financial institutions to be approved by MAS. The companies do not yet hold payment services licenses, and will need to follow up to put into place measures to meet MAS’s license requirements.
- An MAS spokesperson told Forkast.News last week that that the regulator had recently notified several applicants that it was prepared to grant them payment services licenses under the Payment Services Act. Under the act, which came into effect in January 2020, providers of digital token payment services — including cryptocurrency exchanges — must be licensed.
- According to MAS, 170 license applications by digital payment token service providers have been submitted. Thirty applications were withdrawn after engagement with MAS, and two were rejected. “MAS continues to review the outstanding DPT applications,” an MAS spokesperson told Forkast.News in an email. “MAS adopts a rigorous approach in reviewing license applications, and a number of DPT applicants have not met MAS’s standards in the area of money laundering and terrorism financing and technology risk controls.”
See related article: Singapore poised to grant one of first approvals to crypto exchange Independent Reserve
- DBS Bank, Southeast Asia’s largest lender, was one of the first traditional banks in Asia to launch its own cryptocurrency exchange, and it has since made steady progress executing its asset digitalization strategy. Launched last December, the DBS Digital Exchange operates under a Recognised Market Operator license.
- In its recent second-quarter 2021 financial results, DBS reported that its digital exchange did as much as S$180 million (US$133 million) of trading in Q2, and held S$130 to S$140 million of digital assets under custody. DBS Chief Executive Piyush Gupta said the bank aimed to grow the exchange’s investor base to about 1,000 customers this year from “a tad under 400” at the time. The exchange currently only operates during Asian trading hours, but will move to operate 24/7 from Aug. 16.
See related article: DBS Bank’s digital exchange assets surge 60% in Q2
- Once licensed, DBS Vickers, as a member of the bank’s digital exchange, will be able to directly support asset managers and companies trading in digital payment tokens through the exchange, according to DBS’s announcement.
- “We have seen keen interest among asset managers and corporates for access to digital payment token services, and with [DBS Vickers] receiving in-principle approval under the [Payment Services] Act, we are well-placed to meet this growing demand,” said Eng-Kwok Seat Moey, DBS’s group head of capital markets, in a statement. “This could add to DDEx’s volumes in the coming months, and, coupled with DDEx going operational round the-clock, help accelerate growth for DDEx.”
- “This bodes well for our ability to provide integrated solutions across the digital asset value chain notably in the form of STOs, leveraging DBS’s expertise in deal origination to tokenization, listing, distribution, trading and custody,” Eng-Kwok said. “This will contribute to Singapore’s ambitions to be a digital asset hub in Asia.”
See related article: DBS Bank tapping on tokenized bonds as a new way to invest