Singapore has been making significant changes to its Payments Service Act (PSA) to enhance its oversight of the crypto industry and provide better protection for users. These amendments are part of Singapore’s ongoing efforts to establish itself as a cryptocurrency-friendly hub while ensuring that investor protection remains a top priority.
The MAS recently introduced three new digital payment token (DPT) services under the PSA, including custodial services, facilitating the transmission of crypto between accounts and exchanges, and cross-border money transfers. One notable feature is that service providers in the latter two categories do not need to possess or accept digital assets within Singapore. The new regulations require DPT service providers to establish trust accounts for customer funds and implement robust security measures to protect these assets. Additionally, all entities offering these services must comply with strict anti-money laundering and counter-terrorism financing rules and meet user protection and financial stability requirements.
The amended regulations are set to take effect on April 4, with existing service providers being given a grace period under a transitional arrangement. These incumbents must inform MAS within 30 days and apply for licensing within a six-month window to continue operating in Singapore. Moreover, any licensing application must include an attestation report from an external auditor, confirming compliance history and business operations. This report must be submitted within nine months from April 4. Failing to meet these requirements within the specified timeframe will lead to the cessation of operations within the country. The full implementation of the amendments is expected by October 4, when the enhanced user protection measures will be enforced.
The changes made by MAS are likely to have a significant impact on the crypto industry in Singapore. With the introduction of new services and regulations, crypto firms, such as Coinbase and Ripple, are finding Singapore to be an attractive destination for expanding into the Asian market. The increased oversight and protection provided by the amended PSA could lead to greater confidence among investors and users in the country’s crypto sector.
The Monetary Authority of Singapore’s amendments to the Payments Service Act represent a proactive approach to regulating the crypto industry while fostering innovation and safeguarding user interests. By implementing these new regulations and services, Singapore is solidifying its position as a leading cryptocurrency-friendly hub in Asia. The enhanced user protection measures and stricter compliance requirements demonstrate MAS’s commitment to creating a safe and secure environment for crypto businesses and users alike.
Leave a Reply