Overview of virtual assets
DPT vs e-money vs stablecoin vs deposits
E-money vs DPT
In general, e-money is a digital representation of fiat currency and includes the monetary value of the fiat currency that it is denominated in. It takes on the monetary value of the fiat currency that is pegged to by its issuer. E-money has been paid in advance and is stored in a payment account and used to pay for any transactions. Under the Payment Services Act 2019, as it stands now, e-money must be pegged to a single currency and not multiple currencies. Money is defined to exclude DPTs.
On the other hand, a DPT (commonly known as cryptocurrency or virtual currency) is a digital representation of value that is expressed as a unit and is not denominated in any fiat currency or is not pegged to any currency by its issuer.
Two distinct differences between e-money and DPT, as defined under the Payment Services Act, are:
| E-money | DPT |
| • Digital representation of a single fiat currency • Represent a claim on its issuer |
• Digital representation of value and is not to or denominated in any currency • Need not represent a claim on its issuer, some DPTs are not issued by an issuer, e.g. Bitcoin |
According to MAS (FAQs)
last revised on 31 March 2021
19.1 E-money vs DPT: A payment account may take the form of an e-wallet which is funded with e-money. This e-money is denominated in or pegged by the issuer to a fiat currency. This is an important distinction from Digital Payment Token (DPT)s. Where the monetary value of the electronically stored amount in fiat currency cannot be determined without referring to some form of market mechanism, for example through the trading of the electronically stored monetary value on an exchange, such electronically stored amount is not e-money but may be a Digital Payment Token (DPT).
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19.3 E-money vs Deposits: E-money is money paid in advance under a contract for the provision of a service. E-money are not bank deposits and therefore not protected by deposit insurance. That said, MPIs are required to safeguard their e-money float.
Stablecoin
A stablecoin is a class of cryptocurrency that is backed by fiat currency, commodity or a basket of assets, rendering its value to be less volatile than the traditional cryptocurrencies. Whether a specific stablecoin is e-money or DPT would require a study of the features of the specific stablecoin. MAS conducted a public consultation from 23 December 2019 to 28 January 2020 to seek views on the scope of the current definition of e-money and DPTs in the Payment Services Act 2019 and whether the definitions remain appropriate in view of the emerging class of stablecoins. For a summary of the MAS consultation paper, please click here to read Rajah & Tann Singapore LLP update on "Proposed Changes to Payment Services Act 2019 to Address New AML/CFT Risks and Regulatory Issues with Stablecoins". Please click here to view the full text of the consultation paper. MAS has yet to provide a response to feedback received pursuant to the consultation paper.
E-money vs DPT
A payment account may take the form of an e-wallet which contains e-money. The e-money is denominated in or pegged by the issuer to a fiat currency.
DPT - Where the monetary value of the electronically stored amount in fiat currency cannot be determined without referring to some form of market mechanism (e.g. through the trading of the electronically stored monetary value on an exchange), such electronically stored amount is not e-money but may be a DPT.
E-money vs Deposits
E-money is money paid in advance under a contract, for a provision of a service. However, e-money do not constitute bank deposits and are therefore not protected by deposit insurance.
Notwithstanding the above, it is worth noting that MPIs are still required to safeguard their e-money float.
According to MAS (FAQs)
last revised on 31 Mar 2021
19.1 E-money vs DPT:
A payment account may take the form of an e-wallet which is funded with e-money. This e-money is denominated in or pegged by the issuer to a fiat currency. This is an important distinction from DPTs. Where the monetary value of the electronically stored amount in fiat currency cannot be determined without referring to some form of market mechanism, for example through the trading of the electronically stored monetary value on an exchange, such electronically stored amount is not e-money but may be a DPT.
19.2 MAS has also issued a consultation paper on the scope of e-money and DPT. You may wish to refer to part 3 of Consultation on the Payment Services Act 2019 - Scope of E-money and Digital Payment Tokens for more information.
"The definition of “e-money” provides that it is an electronically stored monetary value that is, among other things, denominated or pegged to a particular fiat currency. A “stablecoin” would not amount to e-money as defined as it is backed by a basket of assets or currencies, and not a single currency."
"The definition of “digital payment tokens” states that it is a digital representation of value that, among other things, is not denominated or pegged to any currency. As “stablecoins” are backed by a basket of currencies and other assets, they would not amount to “digital payment tokens” as defined."
E-money is a digital representation of a single fiat currency, taking on the monetary value of the fiat currency pegged to by its issuer. Digital Payment Tokens (DPTs) are a digital representation of value not denominated in any currency, and may not be issued by an issuer. Further clarification can be found in the Payment Services Act (PSA).