For commodity traders, procurement teams and cross-border payment businesses, the central question is not whether digital assets are faster than bank wires. The real question is whether value can move across borders quickly, reliably and compliantly without introducing a new form of settlement, counterparty or regulatory risk. Understanding what an MAS MPI licence means for commodity traders is therefore part of a wider assessment of the settlement infrastructure behind a transaction.

Singapore’s Payment Services Act 2019, commonly called the PS Act or PSA, establishes the licensing and regulatory framework for payment service providers operating in Singapore. It does not make every business that uses stablecoins or digital assets a regulated payment institution. Instead, the analysis depends on what the business does, whose funds or assets it handles and whether it is providing a regulated payment service as a business. The Act commenced on 28 January 2020, while amendments expanding its digital payment token scope took effect in stages from 4 April 2024.

This distinction matters as institutional payment networks expand across Asia. For example, COINUT’s APAC payment-network partnership with Stables illustrates how digital asset businesses can extend regulated payment corridors without presenting digital assets merely as speculative trading products. The business value lies in payment-route access, compliance-led onboarding, and settlement support.

Key Takeaways

  • The MAS Payment Services Act primarily regulates businesses that provide payment services, not every company that uses digital assets.
  • A commodity trader paying its own supplier with stablecoins is in a different regulatory position from a business arranging transfers, custody or conversions for clients.
  • MAS regulates seven categories of payment services, including cross-border money transfers and digital payment token services.
  • An MPI licence is not a blanket approval covering every activity. Compliance teams must verify the exact legal entity, licence type and authorised services.
  • A MAS regulatory authorisation or alternative regulatory arrangement is not the same as an MPI licence.
  • Regulation is only one part of due diligence. Safeguarding, sanctions screening, settlement controls, audit trails and operational resilience remain essential.

What Is the MAS Payment Services Act?

Direct answer: Singapore’s Payment Services Act 2019, often searched for as the “MAS Payment Services Act”, is the country’s framework for licensing payment service providers, regulating specified payment activities and overseeing payment systems.

The MAS Payment Services Act overview identifies seven regulated payment-service categories:

  1. Account issuance service
  2. Domestic money transfer service
  3. Cross-border money transfer service
  4. Merchant acquisition service
  5. E-money issuance service
  6. Digital payment token service
  7. Money-changing service

A company may provide one service or several. Its regulatory obligations therefore depend on its actual operating model rather than the general description it uses in its marketing. MAS maintains separate activity classifications because a provider authorised for one service is not automatically authorised for all seven.

For commodity businesses, the most relevant categories are usually cross-border money transfer services and digital payment token services. The first concerns transferring money between jurisdictions. The second can apply to services involving digital payment token exchange, transfers, custody and related facilitation.

This is particularly relevant when companies begin replacing parts of the traditional correspondent banking chain. As explained in COINUT’s analysis of payment bottlenecks created by correspondent banking, the objective is not to eliminate banking relationships. It is to reduce avoidable delays, unnecessary intermediaries and uncertainty in corridors where conventional payment infrastructure does not meet the transaction’s timing requirements.

Does a Commodity Trader Need an MAS Payment Services Licence?

Not automatically.

A commodity trading company that acquires a digital asset or stablecoin for its own account and uses it to discharge its own commercial obligation may be acting as a customer rather than providing a regulated payment service. However, the conclusion depends on the complete transaction structure, applicable regulatory treatment, and the company’s actual role in handling or facilitating value movement.

The regulatory analysis changes when the company begins carrying on a business that provides payment services to other parties.

A company should obtain Singapore legal advice when it does any of the following:

  • Converts fiat currencies and digital assets for customers or counterparties as a service.
  • Arranges digital asset purchases, sales or transfers for third parties.
  • Receives, controls or safeguards customer digital assets.
  • Operates wallets or accounts on behalf of other businesses.
  • Collects payments from one party and transmits value to another.
  • Facilitates cross-border money movement for customers.
  • Provides settlement infrastructure to affiliated or unrelated entities.
  • Charges fees or earns spreads from providing these activities.

The legal assessment should follow the actual flow of money and assets. Contract terminology alone will not resolve whether an activity is regulated.

A commodity company describing itself as a “technology platform,” “settlement coordinator” or “treasury service” may still fall within the Act when its operating model performs the substance of a regulated payment service.

Why the April 2024 Expansion Matters

Amendments expanding the scope of regulated payment services took effect in stages from 4 April 2024. They brought additional digital payment token activities within the regulatory perimeter, including custodial services and certain token transmission and exchange-facilitation activities.

This closes an important practical gap.

Before assessing a provider, a compliance team should not ask only:

Does the company receive our money?

It should also ask:

Does the company arrange, control, facilitate, safeguard or transmit the digital asset at any stage?

A platform may play a material role in a transaction without holding the customer’s funds directly. Under the expanded scope, simply structuring the service so that assets pass between external wallets does not necessarily place the facilitator outside regulation.

For treasury teams considering stablecoins for cross-border payments, this means the provider’s involvement must be mapped from initial conversion through final settlement.

The assessment should include:

  • Who receives the customer instruction?
  • Who determines the conversion or execution route?
  • Who controls the wallet or private keys?
  • Who initiates the transfer?
  • Who selects or manages liquidity providers?
  • Who conducts sanctions and wallet screening?
  • Who confirms settlement?
  • Who is responsible if the transaction fails?

What Is an MPI Licence?

An MPI licence, or Major Payment Institution licence, is one of the payment institution licences available under the PS Act.

A provider generally requires an MPI licence when its regulated payment activity exceeds the thresholds applicable to a Standard Payment Institution. An MPI is not constrained by the same activity thresholds as an SPI, although it becomes subject to additional regulatory requirements.

MAS states that an SPI must maintain at least S$100,000 in base capital, while an MPI must maintain at least S$250,000. MPI applicants and licence holders must also satisfy governance, financial, compliance and operational requirements relevant to their activities.

For new digital payment token licence applications, MAS also requires supporting materials that include a Singapore legal opinion and an independent external auditor’s assessment. These requirements strengthen the review of whether the proposed activities fall within the Act and whether the applicant’s controls are ready for regulated operations.

What an MPI Licence Can Signal

For a corporate compliance team, an MPI licence can indicate that:

  • The provider operates within a formal MAS licensing framework.
  • Its corporate governance and leadership are subject to regulatory assessment.
  • It has minimum capital obligations.
  • It must maintain relevant policies, controls and records.
  • MAS can supervise the licensed activities.
  • The organisation has identified the payment services it is authorised to provide.

What an MPI Licence Does Not Guarantee

An MPI licence does not mean:

  • Every service offered by the company is regulated.
  • Every affiliated company is covered by the licence.
  • Every digital asset is approved or guaranteed by MAS.
  • Customer funds cannot be lost.
  • Settlement will always be instant or irreversible.
  • The provider has no operational, liquidity or cybersecurity risk.
  • The transaction automatically complies with the customer’s own policies.

This is why licence verification must be performed at the legal-entity and service level.

A company can legitimately hold an MPI licence while offering a service outside the scope of that licence. Conversely, a company may operate under a different regulatory arrangement for a defined activity or period without holding an MPI licence.

Regulatory Status Is Not the Same as an MPI Licence

Compliance documents should not use 'licensed,' 'MAS regulated,' 'registered,' 'authorised,' and 'applying for a licence' as interchangeable terms.

They describe different legal positions.

  • Licensed: The identified legal entity holds a licence covering specified services.
  • Licence applicant: An application may be under consideration, but the licence has not yet been granted.
  • Registered: The entity is recorded under a registration regime, which may have a different scope from licensing.
  • Member of a self-regulatory organisation: The entity is subject to the requirements of that organisation, but this is not necessarily equivalent to a government-issued licence.
  • Operating under applicable regulatory arrangements: The entity may have specific regulatory treatment that should be verified through official sources.

When a provider operates under a specific regulatory arrangement, the compliance team should request:

  • The legal basis for the applicable regulatory arrangement.
  • The activities covered by it.
  • Any applicable restrictions.
  • The entity operating under it.
  • The effective period.
  • The status of any licence application.
  • The implications if the application is withdrawn or refused.

Claims should then be checked against official records, including the MAS Financial Institutions Directory and, where necessary, the current statutory text of the Payment Services Act. The MAS directory identifies payment institutions by licence and authorised activity, demonstrating why checking only the provider’s brand name is insufficient.

What Commodity Traders Should Check Before Using Digital Assets

1. Identify the Exact Service

Do not begin with the token.

Begin with the commercial function:

  • Are you paying a supplier?
  • Receiving proceeds from a buyer?
  • Converting SGD or USD into stablecoins?
  • Moving collateral?
  • Funding an overseas subsidiary?
  • Settling an OTC purchase?
  • Holding assets temporarily before onward settlement?

The regulatory and operational risks depend on the complete transaction flow.

A global brand may operate through several entities.

Confirm:

  • Which entity signs the agreement.
  • Which entity receives fiat currency.
  • Which entity executes the conversion.
  • Which entity controls the wallet.
  • Which entity provides customer support.
  • Which entity appears on the transaction record.
  • Which jurisdiction governs disputes.

A provider’s licence in one country does not automatically cover an affiliated entity in another.

3. Verify the Exact Licence Scope

Do not accept “MAS regulated” as a complete answer.

Ask which regulated services appear against the entity in the MAS directory. A licence covering money-changing does not automatically authorise digital payment token services. Similarly, authorisation for digital payment token services does not necessarily cover every cross-border money-transfer arrangement.

4. Review the OTC Execution Process

Large commodity-related transactions often require negotiated execution rather than an open exchange order book.

An institutional OTC desk involved in regulated payment or digital payment token services should be able to document: 

  • How a quote is requested and approved.
  • How long the quote remains valid.
  • Which legal entity is the counterparty.
  • When funds must be delivered.
  • When the digital asset will be released.
  • How settlement is confirmed.
  • What happens if either party fails to perform.
  • How transaction records are delivered to treasury and compliance.

5. Assess Safeguarding and Wallet Control

Ask where assets are held during each stage of the transaction.

Determine:

  • Whether assets are held in omnibus or segregated wallets.
  • Who controls the private keys.
  • Whether a third-party custodian is used.
  • How withdrawals are approved.
  • Whether duties are segregated.
  • How balances are reconciled.
  • What happens during an operational or cybersecurity incident.

Regulation does not remove custody risk. It creates a framework in which safeguards, records and accountability can be assessed more systematically.

6. Examine AML, Sanctions and Source-of-Funds Controls

Commodity businesses commonly operate across multiple countries, intermediaries and ownership structures. This makes counterparty and payment screening especially important.

The provider should be able to explain:

  • Customer and beneficial-owner verification.
  • Source-of-funds and source-of-wealth checks.
  • Transaction monitoring.
  • Sanctions screening.
  • Blockchain or wallet screening.
  • High-risk jurisdiction controls.
  • Escalation and enhanced due diligence.
  • Record-retention standards.
  • Procedures for rejected or frozen transactions.

A provider that promises frictionless settlement by avoiding compliance checks is not solving the problem. It is transferring regulatory risk to the customer.

7. Define Settlement Finality

Digital asset transfers can be rapid, but speed is not the same as commercial settlement finality.

The parties must agree on:

  • The correct token and network.
  • The receiving wallet.
  • Required blockchain confirmations.
  • Who pays network fees.
  • The applicable exchange rate.
  • The point at which the obligation is considered paid.
  • The process for incorrect-network or incorrect-address transfers.
  • The process if the stablecoin becomes restricted or loses liquidity.

This is closely connected to the delivery-versus-payment problem in OTC settlement. Cargo, money and compliance approval may each move on a different timeline. A faster digital transfer only helps when the wider process brings those timelines together.

8. Preserve an Auditable Settlement Trail

A corporate settlement process should produce evidence suitable for:

  • Internal treasury controls.
  • External audit.
  • Board reporting.
  • Compliance reviews.
  • Tax documentation.
  • Banking-partner inquiries.
  • Counterparty disputes.
  • Regulatory requests.

Required records may include the quote, approval, bank transfer, wallet address, transaction hash, exchange rate, fees, screening results and settlement confirmation.

Illustrative Example: A Supplier Payment After the Banking Cut-Off

The following is a composite scenario designed to illustrate the process. It is not presented as a claim about a named customer.

A Singapore-based metals trader must settle a US-dollar supplier obligation before cargo documents can be released. The supplier operates in another time zone and is willing to receive a USD-denominated stablecoin permitted under both parties’ internal policies and supported by the settlement provider.

The trader’s bank has already passed its international wire cut-off. Waiting until the following business day may delay document release and extend the trader’s working-capital exposure.

A properly structured workflow could proceed as follows:

  1. The trading company submits the transaction details and beneficiary information to its institutional settlement provider.
  2. The provider completes required counterparty, sanctions, wallet and source-of-funds checks.
  3. The parties agree on the USD-to-stablecoin conversion rate, fees, receiving network and settlement terms.
  4. The trader transfers fiat funds through the agreed funding rail.
  5. The provider executes the conversion through its OTC process.
  6. The stablecoin is transferred to the verified supplier wallet.
  7. The transaction hash and settlement confirmation are provided to both parties.
  8. The trader retains the complete record for treasury, audit and compliance purposes.

The commercial benefit is not simply that a blockchain transfer can operate outside banking hours.

The value comes from combining:

  • Verified counterparties.
  • Agreed pricing.
  • Controlled execution.
  • Compliance screening.
  • Clear settlement responsibility.
  • Documented finality.
  • An auditable record.

Without these controls, faster transfer technology can create faster operational mistakes.

How COINUT Fits Into the Compliance Discussion

COINUT should not be assessed only as a venue for buying and selling digital assets. For institutional customers, one relevant use case is supporting cross-border settlement between fiat currencies and digital assets through OTC and payment infrastructure.

COINUT states that it has operated in Singapore since 2013 and maintains regulatory standing across several jurisdictions. The MAS Financial Institutions Directory provides the official reference point for verifying Payment Services Act-related regulatory status. COINUT states that Coinut Pte. Ltd. currently operates under the Payment Services (Exemption for Specified Period) Regulations 2019 while its Major Payment Institution licence application remains in progress. The exemption is not an MPI licence and should not be interpreted as MAS approval or supervision for the specified services. It also identifies VQF membership in Switzerland, FINTRAC MSB registration in Canada and U.S. MSB registration. These statuses are not legally equivalent and should be assessed according to the relevant jurisdiction, legal entity and service scope.

2026 regulatory update: MAS published a consultation in September 2026 proposing amendments to the Payment Services Act for Singapore’s stablecoin regulatory framework. Businesses considering stablecoin settlement should therefore verify the latest requirements before implementation, as the framework continues to evolve.

COINUT has also announced that its Singapore service model is now focused on institutional, corporate and accredited investor customers rather than new retail individual customers. This direction aligns its operations more closely with the needs of professional counterparties that require structured onboarding, larger transaction support and documented settlement processes.

For commodity businesses, the practical capabilities to evaluate include:

  • Fiat-to-digital-asset conversion.
  • Institutional OTC execution.
  • Multi-currency settlement coordination.
  • Compliance-led onboarding.
  • Support for large transactions.
  • Transaction and settlement records.
  • Cross-border payment connectivity.
  • Availability beyond normal bank cut-off windows.

Previous infrastructure announcements can also provide context during operational due diligence. COINUT’s 2025 explanation of its BCB-supported banking and payment infrastructure describes how its Singapore, Switzerland and Canada operations were connected to multi-currency payment and liquidity services.

What Compliance and Treasury Teams Should Do Next

Before approving digital assets for supplier payments or commodity settlement, form a working group involving:

  • Compliance.
  • Treasury.
  • Legal.
  • Finance.
  • Information security.
  • Operations.
  • Tax.
  • Internal audit.

Map one real transaction from beginning to end. Identify every entity, account, wallet, conversion, approval and transfer involved.

Then complete the following actions:

  1. Determine whether your company is only using a payment service or may itself be providing one.
  2. Verify the provider’s legal entity and regulatory status.
  3. Confirm that the required activity is within the provider’s authorised regulatory scope.
  4. Review AML, sanctions, safeguarding and wallet controls.
  5. Establish written settlement-finality rules.
  6. Test the process with a controlled transaction.
  7. Retain the evidence required for audit and internal governance.
  8. Reassess the provider when the service, corridor, token or regulatory status changes.

Digital assets can reduce some of the delay and uncertainty associated with cross-border commodity payments. They do not remove the need for disciplined compliance.

The strongest settlement partner is not necessarily the one promising the fastest transaction. It is the one that can explain precisely how the transaction will be executed, screened, safeguarded, documented and completed.

You move the cargo. The settlement infrastructure must move the value with the same level of control.

Frequently Asked Questions

Does using stablecoins make a commodity trader a payment service provider?

Not automatically. Using stablecoins to meet a company’s own commercial obligations does not, by itself, establish that the company is providing a regulated payment service. The assessment depends on the complete transaction workflow and whether the company exchanges, transfers, safeguards or facilitates assets for other parties. Singapore legal advice should be obtained for the actual structure.

What is an MPI licence under the MAS Payment Services Act?

An MPI licence is a Major Payment Institution licence for providers whose regulated payment activities exceed the thresholds applicable to a Standard Payment Institution. An MPI is subject to MAS oversight and a minimum base-capital requirement of S$250,000, but its licence only covers the services identified within its authorised scope.

Is alternative MAS regulatory treatment the same as an MPI licence?

No. A regulatory arrangement that does not involve an MPI licence is not equivalent to an MPI licence. Compliance teams should verify the applicable regulatory basis, covered activities, conditions, duration and relevant legal entity through official sources.

How can a business verify an MAS payment institution?

Search the MAS Financial Institutions Directory using the provider’s exact legal name. Check the licence type and the specific payment services listed against the entity rather than relying only on its website, brand name or sales materials.

What documents should compliance teams request from a digital asset settlement provider?

Compliance teams should request evidence of regulatory status and service scope, corporate-entity details, AML and sanctions policies, safeguarding arrangements, wallet-control procedures, settlement terms, incident-escalation processes, audit-trail samples and information about third-party banks, custodians and liquidity providers.

This article provides general business and regulatory information and does not constitute Singapore legal advice. Businesses should obtain professional advice based on their actual activities and transaction structure.