The Monetary Authority of Singapore (MAS) has provisionally accepted a licensing application from Australian cryptocurrency exchange Independent Reserve.

If the ‘in principle' licence is finalised, Independent Reserve will be regulated under Singapore's Payment Services Act (PSA) as a provider of digital payment token (DPT) services in the city state, the company said in a statement.

It said it is one of the first virtual asset service providers (VASPs) to obtain an in principle approval letter for a major payment institution licence in Singapore.

Bryan Tan of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, the law firm behind Out-Law, said: "This initial round of PSA licence applications has been ongoing since February 2020 and the MAS' very thorough approval process includes multiple rounds of interviews and meetings with key management.

Applicants can now see the light at the end of the tunnel and we expect that in days to come, more announcements of such in principle approvals will be made."

According to MAS, by the end of July it had received over 480 crypto service licence applications under the PSA which took effect in January 2020.

Of that number, 170 applications were for a licence to provide DPT services. It said 90 DPT service providers including global exchanges Binance, Coinbase and Gemini are currently operating under an exemption to provide services.

MAS said that in considering the licensing applications, it focuses on the applicant's understanding of risks relating to money laundering and financing of terrorism and the technology risks posed by their business model, as well as the adequacy of controls in place to reduce such risks.

Independent Reserve was established in 2013 and set up its overseas business in Singapore in 2019 to provide digital asset exchange and ‘over-the-counter' trading services.