Bank-issued tokenised deposits

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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.

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