Bank-issued tokenised deposits

Read the PDF edition (1 page)

The framework distinguishes an SCS from a tokenised bank deposit. A tokenised deposit is a bank liability, recorded on a distributed ledger, that remains a deposit for the purposes of the Banking Act 1970 and deposit insurance. It is transferable only among the bank's customers or within a permissioned network of banks. It is not a bearer instrument that circulates freely on a public blockchain. MAS has excluded tokenised deposits from the SCS framework and treats them under banking law.¹ Singapore banks have piloted tokenised deposits in Project Guardian and Project Orchid, and DBS, OCBC and UOB have each run live transactions settling tokenised assets with tokenised deposits (see Chapter VII).

The distinction has consequences for the holder. A tokenised deposit is insured up to the Singapore Deposit Insurance scheme limit and is a claim against a bank subject to prudential supervision. An SCS is a claim against a non-bank issuer backed by a segregated reserve and is not deposit-insured. A customer of a Singapore bank who holds tokenised Singapore dollars therefore has a different legal position from the holder of XSGD, even though both tokens may trade at par and settle the same transaction. The two forms are intended to coexist: tokenised deposits for bank customers inside permissioned networks, SCS for the open token economy.

Notes

Reed Smith, 23 August 2023 (above): tokenised bank liabilities are excluded from the framework; MAS will monitor bank initiatives. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.

English

Contact

Dr Alexander Ressos, TEP

Of Counsel, KGP Legal LLC

I am Of Counsel with KGP Legal LLC in Singapore, where I work with a global client base of successful entrepreneurs and their families, independent asset managers, commodity trading houses and other commercial clients. I am a German and Swiss attorney-at-law, also admitted as a solicitor in England & Wales and in Hong Kong. I divide my time between Zug in Switzerland, Singapore and Hong Kong. Since 2017 I have advised international clients on more than 700 crypto and digital asset projects. I also have extensive experience in cross-border litigation and arbitration in Singapore, Hong Kong and other markets in South-East Asia and Greater China.

I operate across the key financial centres in South-East Asia, the Middle East and Switzerland, with a particular focus on asset protection, international tax and estate planning, as well as trusts, company administration and other fiduciary services. My philosophy is to serve as a trusted advisor working closely with my clients and to help them achieve their commercial objectives.

All Singapore law advice is provided through KGP Legal LLC, an established and duly licensed firm of Singapore advocates and solicitors.

KGP Legal LLC is a medium-sized law firm in Singapore that is capable of providing the full range of legal services and corporate administration work. Please contact me directly at [email protected] if you need any further information.

Get in touch →

Articles and Insights

Setting up or expanding in Singapore?

SingaporeIQ is edited by Dr Alexander Ressos, an international business lawyer with more than 15 years of local experience in Singapore as a permanent resident, a Singapore registered foreign lawyer and managing partner of a Singapore foreign law practice. In addition to significant experience in cross-border investments and transactions, UHNWI private client work and sanctions/export controls, Dr Ressos has extensive experience in cross-border business and in crypto and digital-asset projects in Singapore, drawn from more than 700 projects since 2017.

If you are planning a company incorporation, an investment, a holding structure or a market entry through Singapore, you can reach Dr Ressos directly at [email protected]. Singapore law advice is provided by KGP Legal LLC, a licensed firm of Singapore advocates and solicitors. Dr Ressos and his team facilitate the full range of Singapore legal, compliance and company administration services, including company incorporation, corporate transactions, commercial contracts, crypto and digital assets, financial regulatory work and dispute resolution, including litigation in the Singapore courts. For legal, tax and fiduciary services in Switzerland, see helveticaregister.com.