• 29 May, 2024

Singapore Strengthens Crypto Regulations with Expanded Payment Services Act

The Monetary Authority of Singapore (MAS) has announced comprehensive amendments to the Payment Services Act (PS Act) and its subsidiary legislation, marking a significant step in expanding the regulatory framework for digital payment token (DPT) service providers. Renowned crypto journalist Colin Wu, through Wu Blockchain, shared his insights in a recent X post that this move aims to encompass a broader array of payment services under MAS oversight, emphasizing enhanced user protection and financial stability measures. 

According to a recent report, regulatory updates will be implemented in stages starting from April 4, 2024. These changes demonstrate MAS’s proactive approach to adapting to the evolving digital finance landscape. Under the new regulatory framework, several key activities will now fall under MAS’s jurisdiction. This includes the provision of custodial services for DPTs, the facilitation of DPT transactions between accounts, the facilitation of DPT exchanges without direct possession of the money or DPTs, and the facilitation of cross-border money transfers, regardless of whether the transactions involve receiving or accepting money in Singapore.

These changes reflect MAS’ commitment to safeguarding the integrity of Singapore’s financial system in the face of rapid technological advancements. Furthermore, the amendments empower MAS to enforce regulations aimed at preventing money laundering and terrorism financing, enhancing user protection, and ensuring the financial system’s stability. 

For existing entities within the newly expanded scope of the PS Act, MAS has outlined transitional arrangements. These entities are required to notify MAS within 30 days and submit a license application within six months from April 4, 2024. At the same time, their applications undergo MAS review, provided they submit an attestation report on their business activities and compliance with AML and CFC requirements within nine months from the specified date.

Moreover, entities that fail to meet the necessary criteria must cease their operations once the amendments take effect, ensuring that only compliant entities can operate within Singapore’s financial system. This measure is part of MAS’ broader strategy to protect consumers and enhance the operational integrity of financial services.

The amended Payment Services Regulations pertaining to the safeguarding of customer assets by DPT service providers will come into effect six months after 4 April 2024. These regulations require the segregation of customer assets into trust accounts, the maintenance of accurate books and records, and the implementation of effective systems and controls to protect the integrity and security of customer assets.

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