What are the rules and regulations for Digital Gold in Singapore?
What is “Digital Gold”
Digital gold generally refers to a digital token or asset whose value is tied to or backed by physical gold. This could allow owners to hold gold in small/fractional units, trade it digitally, and in some cases redeem for actual gold bars/coins stored in vaults. It is somewhat between a commodity and a digital asset, and whether it’s regulated depends on how it is structured, marketed, and traded.
Singapore’s Regulatory Framework: Key Laws & Authorities
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Monetary Authority of Singapore (MAS) is the primary financial regulator. It oversees digital assets under a number of frameworks.
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Payment Services Act 2019 (PS Act): governs “digital payment token” (DPT) services, among other payment‑services related activities.
Tax / Goods & Services Tax (GST) laws via Inland Revenue Authority of Singapore (IRAS).
How “Digital Gold” Might Be Regulated in Singapore
There is no regulation that uses the exact term “digital gold” in all cases, but digital gold offerings will generally be caught under one or more status/categories depending on how they are structured. Key regulatory considerations include:
| Regulatory Aspect | What Singapore Law / MAS / IRAS Says | Implications for Digital Gold Products |
|---|---|---|
| Digital Payment Token (DPT) Services under PSA | The PS Act requires licensing for providers of DPT services. That means if a digital gold token is treated as a “digital payment token,” the platform or issuer may need to be licensed. | A digital gold provider may need to apply for a license, follow rules for customer protection, anti‑money laundering (AML), risk disclosure, etc. |
| Digital Tokens / Tokens under Securities Laws | MAS has clarified that certain digital tokens (for example, those that give rights to benefits, or are marketed like securities) could fall under the Securities and Futures Act (SFA). Secondary trading platforms for such tokens might need approval. | If a digital gold token gives more than just the gold backing — e.g. profit sharing, interest, or rights beyond simple ownership of gold — it might be treated like a security, which means more regulatory oversight, disclosures, etc. |
| Custodial / Storage, Audits, Backing | MAS regulation for DPT services includes obligations around custody, risk management, “safe keeping” of assets, especially for tokenised or digital assets. Also there is increasing attention on reserve backing & audits (similar to stablecoin regulation). | Digital gold providers should maintain transparent gold reserves, have audits of the physical gold backing, ensure secure storage, disclose how redemption works, etc. |
| Stablecoin‑type Regulation (if applicable) | MAS has a framework for single‑currency stablecoins (SCS) pegged to S$ or G10 currencies. That includes rules for reserve assets, liquidity, redemption at par, disclosures, etc. | If a “digital gold token” somehow functions like a stablecoin or uses similar mechanisms (e.g. issuing tokens redeemable for gold, keeping reserves, etc.), some of those rules might inform what is required. |
| Tax / GST Treatment | Singapore has rules around GST exemption for “Investment Precious Metals” (IPM). Gold bars, coins, etc., meeting certain purity and trading criteria are exempt from GST on importation / supply. Also, digital payment tokens are exempt from certain GST obligations under some criteria. | If digital gold is treated as “investment precious metal” or can be structured similarly, it may be exempt from GST. But whether a digital gold token qualifies often depends on fulfilling criteria — purity, form, who issues it, etc. Also, if there are services (storage, platform fees), those may attract GST. |
| Consumer Protection and AML / KYC | The laws governing payment services, digital payment tokens, etc., include strong AML / KYC obligations. MAS requires providers to have adequate controls. There are also rules for disclosure of risks. | Digital gold platforms must verify identity of customers, monitor transactions, prevent money laundering. Need to provide clear disclosures: fees, redemption process, how physical backing is handled, liquidity, etc. |
What Is Clear vs What Is Unclear / Gaps
Clear:
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GST exemption exists for certain investment precious metals if they meet criteria (purity, form, etc.). SJA+1
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The PS Act treats digital payment tokens / DPT services as a regulated activity needing licensing (if relevant). Wikipedia+1
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MAS has made recent amendments and additions expanding regulation of digital‑asset providers, e.g. custodial services and cross‑border transfers. Digital Watch Observatory
Less clear / under development:
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Exactly when a “digital gold token” is or is not a “security” under the SFA depends on its rights, how it's marketed; many digital gold issuers may try to structure so they avoid being “securities”, but there is risk.
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Whether all “digital gold” tokens qualify for IPM‑like GST exemptions — since the criteria for IPM are strict (purity, accredited source, bar / coin form, etc.). A token or fractional scheme might not meet all criteria.
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Rules around redemption (physical delivery) are often in the fine print and may not be regulated uniformly. Minimum amounts, fees, delivery time, etc., may vary and not always enforced.
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Auditing / proof of reserves obligations may be present in MAS guidelines or expectations, but there may not yet be a uniform standard specifically for digital gold.
Implications for Businesses & Investors
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Companies offering digital gold in Singapore should closely assess whether their product is caught as a digital payment token, a token with security features, or something else. Depending on which, there are licensing / regulatory obligations.
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Must have robust infrastructure: custody / vaulting, insurance, reserve backing, audits. Transparency is important or customers / regulators may challenge claims.
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For investors / users: check the provider’s license status under PS Act; read terms for physical delivery; check purity of gold backing; know fees (storage, premiums, redemption) and potential tax / GST implications.
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Stay alert for regulatory changes: Singapore is evolving its rules in digital assets, stablecoins, tokenisation etc., so what is allowed today may get more constrained or clarified in future.
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