MAS is seeking feedback on proposed amendments to the standards relating to:

(a) the regulatory framework for capital and large exposures for Singapore-incorporated banks; and

(b) the regulatory framework for liquidity for banks in Singapore. 

The proposed amendments are aimed at implementing the standards relating to the prudential treatment and disclosure of cryptoasset exposures, published by the Basel Committee on Banking Supervision (BCBS) in December 2022 and July 2024, and subsequently updated in July 2024 and November 2024.

MAS proposes amendments to address the prudential treatment and disclosure of cryptoasset exposures to the following Notices:

(a) MAS Notice 637 on risk based capital adequacy requirements for banks incorporated in Singapore;

(b) MAS Notice 649 on minimum liquid assets and liquidity coverage ratio;

(c) MAS Notice 651 on liquidity coverage ratio disclosure;

(d) MAS Notice 652 on net stable funding ratio;

(e) MAS Notice 653 on net stable funding ratio disclosure; and

(f) MAS Notice 656 on exposures to single counterparty groups for banks incorporated in Singapore.

In addition, MAS proposes amendments to MAS Notice 637 to revise the minimum requirements for Additional Tier 1 (AT1) and Tier 2 Capital relating to the type of investors they are issued to.

MAS also proposes amendments to MAS Notice 637 to enhance the clarity of requirements on the computation of the capital conservation buffer and countercyclical buffer and the recognition of credit risk mitigation (CRM) under synthetic securitisations.

Deadline for comments is 28 April 2025.

The Letter of Intent will facilitate the sharing of information on regulatory frameworks for capital markets and digital assets, sharing of experience in anti-money laundering and counter-terrorism financing, and building of capacity as well as mutual sharing of experiences and frameworks for the regulation and supervision of capital markets and digital assets.

Deadline for comments is 4 November 2024.

Commenting on the announcement, Assistant Managing Director (Policy, Payments & Financial Crime) at MAS Ms Loo Siew Yee said: “The use of Singpass Face Verification will significantly strengthen the process of digital token set up. This is important as the digital token will be used as a factor to approve subsequent transactions. MAS will continue to work closely with banks on measures to protect customers against scams. We urge consumers to maintain vigilance and avoid falling prey to scams by keeping updated on the latest scam tactics, practising good cyber hygiene and making use of Money Lock.”

The authority also announced the successful completion of the first phase of the Global Layer One (GL1) initiative  and plans to develop standards, market practices and governing principles of foundational digital infrastructure for tokenised assets.

The amendments will bring the following activities within the scope of regulation under the Payment Services Act:

• provision of custodial services for digital payment tokens;
• facilitation of the transmission of digital payment tokens between accounts and facilitation of the exchange of digital payment tokens, even where the service provider does not come into possession of the moneys or tokens; and
• facilitation of cross-border money transfer between different countries, even where moneys are not accepted or received in Singapore.

The amendments will empower MAS to impose requirements relating to anti-money laundering and countering the financing of terrorism, user protection and financial stability on digital payment token service providers.

Under transitional arrangements, entities currently conducting activities under the Act’s expanded scope must notify MAS within 30 days, and submit a licence application within six months from 4 April 2024, if they wish to continue the activities on a temporary basis while MAS reviews their licence applications.

The licence application must be accompanied by an attestation report of the entity’s business activities and compliance with anti-money laundering and countering the financing of terrorism requirements, duly completed by a qualified external auditor, within nine months from 4 April 2024.

The initiatives are:

• a blueprint outlining the infrastructure required for a digital Singapore dollar; 
• expanding digital money trials; and 
• a plan to issue a “live” central bank digital currency for wholesale settlement.

The Orchid Blueprint sets out the technology infrastructure that would be required to facilitate digital money transactions in the future. The blueprint builds on learnings from the Project Orchid industry trials, and identifies the following infrastructure building blocks for the sound use of digital money in Singapore: 

• Settlement ledger - to record digital money transfers, with supporting features such as native programmability and atomic settlement of digital tokens.
• Tokenisation bridge - to connect existing account-based settlement systems with ledgers compatible with tokenised forms of digital money.
• Programmability protocol - to use Purpose Bound Money (PBM) as a common protocol to specify the conditions for the use of digital money. 
• Name Service - to translate between wallet addresses and alternative name identifiers that are readable and meaningful for verification.

To test the broad applicability of PBM and digital money, MAS will expand Project Orchid’s digital money trials . Four new trials will be undertaken with industry players to examine relevant infrastructure components and commercial models:

• tokenised bank liabilities 
• wallet interoperability 
• supplier financing
• institutional payment controls.

To complement the digital money trials by the financial industry involving retail and corporate users, MAS will commence the development of CBDC for wholesale interbank settlement next year. MAS will pilot the 'live' issuance of wholesale CBDCs for the first time, after previously simulating issuance within test environments

The first pilot will involve the use of 'live' wholesale CBDC to settle retail payments between commercial banks. Future pilots could include the use of 'live' wholesale CBDC for the settlement of cross-border securities trade.