There are different application criteria for each type of licence.For the digital full bank licence, companies headquartered in Singapore and controlled by Singaporeans can apply for it; foreign companies will be able to apply for it only if they have a joint venture with a Singapore local company and the joint venture meets the headquarter and control requirements. For the digital wholesale bank licence, all companies may apply.”The industry is buzzing about this announcement – several payment service providers have flourished in Singapore and South-east Asia over the years and have built up significant user bases”, said Bryan Tan, technology partner of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, the law firm behind Out-Law. “These players are considering whether to make the step up and leverage their technology and experience and offer more banking services”, he added.
This March, Hong Kong issued four virtual banking licences to Alibaba, Tencent, PingAn and Xiaomi, bringing the current total to eight licences. Singapore Prime Minister Lee Hsien Loong said that MAS was ‘actively studying’ whether to allow virtual banking licences in the country, two days before the MAS announced the upcoming issue of the five digital bank licences, according to the South China Morning Post
The five new digital bank licenses are believed to be a further development of the existing digital banking framework that was first introduced in 2000 by MAS. Applications are expected to be open this August.