Payment Services Act DPT licences — MPI versus SPI

A licence under the Payment Services Act is the most misunderstood sticker in Singapore crypto. People treat it as a guarantee, a product rating or a reason to skip the rest of the homework. It is none of those. It is a permission for a named company to provide specified payment services, at a specified scale, under a specified set of notices. This piece is about that permission: Standard versus Major Payment Institution, which activities sit on the schedule, and the long list of things a DPT licence does not do for you.

It sits next to the regulation overview and the DPT definition. It is not a recommendation to use any licensee, and it is not a substitute for a search of the Financial Institutions Directory on the day you send SGD.

The three licences, and why crypto firms use two of them

The Act creates three licence types. A money-changing licence is for buying and selling foreign currency notes. It is not how you run a Bitcoin book. Everyone else applies for a Standard Payment Institution (SPI) licence or a Major Payment Institution (MPI) licence.

The split is about scale. Section 6(5) of the Act sets thresholds. In the MAS summary: S$3 million of monthly transactions for any one payment service (other than e-money account issuance and money-changing); S$6 million a month across two or more such services; or S$5 million of daily outstanding e-money. Below those lines, an SPI can be the right application. Above them, the firm needs an MPI. An SPI that is approaching the line is expected to apply to vary its licence before it crosses, not after a busy month.

An MPI can provide the payment services on its schedule without those volume caps. In exchange it takes on a heavier package: higher base capital (MAS’s licensing guidelines put MPI base capital at S$250,000, against a lower figure for SPIs), a stronger expectation of capital buffer, and — for the relevant services — statutory safeguarding of customer money. MAS is also clearer that the scale of an MPI poses greater risk, which is why the directory entry for an MPI reads the way it does.

For a retail customer the type is information, not a score. A small SPI that does one thing carefully can be a better place to buy S$2,000 of Bitcoin than an MPI that lists a hundred tokens you will never hold. An MPI that safeguards SGD properly is still not a bank. Look up the legal entity, confirm Digital Payment Token service is on the schedule, and then read the product.

The activities: what “DPT service” now includes

The Act lists payment services as activities. Account issuance, domestic and cross-border money transfer, merchant acquisition, e-money issuance, digital payment token service, money-changing. A firm’s licence is a combination of those activities, not a vague “crypto licence”.

Digital payment token service used to be described mainly as buying or selling DPTs, or running a platform where others exchange them. Amendments and the expanded scope brought in further conduct: transmitting or arranging the transmission of tokens; safeguarding tokens or the instruments that control them (custodial wallets); and inducing or actively facilitating buys and sells even where the firm never holds the money or the tokens. If a business in Singapore is doing those things for customers, MAS’s working assumption is that it needs to be licensed or exempt.

That expansion is why “we only match buyers and sellers, we never touch the coins” is no longer a clever structure. It is also why a custody-only wallet business and a brokerage can both show up as DPT service providers. When you read a directory entry, read the activity list. A firm licensed for cross-border money transfer and not for DPT is a remittance company. A firm licensed for DPT and e-money is doing two jobs, with two safeguarding stories.

Variation matters. A licensee that wants to add an activity files for a variation and must be ready to comply before it starts. A new token listing on an existing DPT book is usually a product decision inside an existing activity. A new “earn” product, a new fiat wallet, or a new overseas corridor can be an activity decision. If a platform’s product range suddenly looks like a bank, ask what was varied.

What the licensing process is trying to test

MAS’s licensing guidelines are public, and they are not a mystery. The applicant should be a Singapore company or a Singapore branch of a foreign company, with a real office where books can be kept and a person who can take complaints. Directors and controllers are assessed for fitness. At least one executive director should be a citizen or permanent resident, or the board should mix an employment-pass executive director with a citizen or PR director. Technology risk, outsourcing, and anti-money-laundering programmes are not appendices; they are the application.

For DPT firms the AML notices are specific. So are the consumer-protection guidelines: retail risk-awareness assessments, no public touting, no credit-card DPT purchases, no retail staking or lending of customer assets. A licence granted in 2020 does not freeze those expectations. The firm is expected to keep up.

None of this is a promise that the firm will be well run next year. It is a filter at the door and a set of ongoing duties. Firms fail, surrender licences, or leave the retail market. Luno’s Singapore exit is the example readers remember. A directory entry is a snapshot. Check it when you on-board, and check it again if you are about to raise a limit.

What a licence does not guarantee

This is the section to read twice.

A DPT licence does not make the token legal tender. Only Singapore dollars do that. It does not make the token an MAS-approved investment. MAS has spent years saying the opposite: DPT trading is not suitable for the general public.

It does not turn your BTC or ETH balance into a bank deposit. The Singapore Deposit Insurance Corporation exists to protect eligible SGD deposits with member banks, up to the published limit. A payment institution is not that member bank. Even the SGD you have not yet spent on a token, sitting as a stored balance at the platform, is relevant money to be safeguarded under the Act — a real protection, and a different one from SDIC. Once it is a token, you hold a DPT, on a book or in a wallet. Segregation of customer assets, which MAS now requires of DPT service providers, is meant to keep your tokens out of the firm’s own estate. It is not a full insurance policy against every failure mode, and it does not price the token.

It does not guarantee withdrawals in a stress week. It does not guarantee that a stablecoin will hold its peg. It does not guarantee that the firm’s parent overseas will behave. It does not mean every token on the menu has been reviewed as a capital-markets product. It does not replace your own custody decisions.

It also does not mean the firm is allowed to do whatever a global affiliate does. A group can have an MPI in Singapore and a wilder book in another country. You want the Singapore entity’s terms, the Singapore activity list, and the Singapore support channel.

How a reader should use the directory

Search the company name on the receipt, not the brand on the icon. Confirm the licence type and the activities. If Digital Payment Token service is missing, stop. Then read the Investor Alert List for the brand you saw in the advert. The overview explains why those two lists disagree more often than marketing departments would like.

If you are comparing venues for an actual purchase, the licence is the first filter, not the last. Spread, PayNow reliability, withdrawal networks and whether XRP needs a tag are product questions. They live in the exchange guide and the coin how-tos. The licence tells you the firm is allowed to ask you those questions. It does not answer them.

Firms such as Ripple Markets APAC Pte Ltd show why the activity list matters. That MPI is a payments business that can use DPTs, including XRP, inside regulated flows for institutional customers. It is not a retail XRP shop. Treating every MPI as a consumer exchange is how people send money to the wrong mental model. The XRP guide keeps that distinction in view.

A licence is worth having on the other side of your FAST transfer. It is not a reason to relax about the token, the size, or the recovery phrase. For whether you may hold the token at all, read is crypto legal in Singapore. For the tax file that follows a licensed purchase, read the IRAS piece. For the rest of the statute-level desk work, stay on regulation.