The Monetary Authority of Singapore (MAS) has recently made significant amendments to its Payments Service Act (PSA) with the aim of strengthening its oversight and increasing user protection within the cryptocurrency industry. These revisions are part of Singapore’s broader strategy to establish itself as a favorable location for crypto businesses, supported by a regulatory framework that promotes innovation while ensuring the safety of investors. As a result of these changes, Singapore has become an attractive destination for crypto firms such as Coinbase and Ripple, seeking to expand their presence in Asia.
New Services and Requirements
One of the key changes introduced by MAS is the addition of three new digital payment token (DPT) services under the PSA. These services include custodial services, facilitating the transfer of crypto assets between accounts and exchanges, and enabling cross-border money transfers. Importantly, service providers offering these services are not required to have possession of or accept digital assets within Singapore. However, they must establish trust accounts for customer funds and implement strong security measures to protect these assets. Additionally, all entities providing these services must comply with strict anti-money laundering and counter-terrorism financing regulations, as well as meet user protection and financial stability requirements.
Implementation and Compliance
The amended regulations are set to come into effect on April 4, but existing service providers are being given a grace period to comply with the new requirements. Under a transitional arrangement, incumbents must notify MAS within 30 days and apply for licensing within a six-month period in order to continue operating in Singapore. Furthermore, any licensing application must be accompanied by an attestation report from an external auditor, confirming the provider’s compliance history and business operations. This report must be submitted within nine months from April 4. Failure to meet these requirements within the specified timeframe will result in the termination of operations in the country. The full implementation of the regulatory changes is expected to be completed by October 4, when the enhanced user protection measures will be fully enforced.
The recent amendments to the Payments Service Act by MAS signal Singapore’s commitment to strengthening its regulatory framework for the cryptocurrency industry. By introducing new services and requirements, the country aims to enhance user protection and maintain financial stability while continuing to attract crypto businesses to its shores. It is crucial for existing service providers to promptly comply with the new regulations to ensure continued operation in Singapore’s crypto market.