Singapore’s Payments Service Act (PSA) underwent significant amendments by the Monetary Authority of Singapore (MAS) to strengthen its jurisdiction and amplify user protection within the cryptocurrency industry. These changes reflect Singapore’s dedication to establishing itself as a crypto-friendly hub that prioritizes investor security alongside fostering innovation.
Expansion of Digital Payment Token Services
MAS integrated three new digital payment token (DPT) services into the PSA, which include custodial services, facilitating crypto transactions between accounts and exchanges, and cross-border money transfers. Particularly noteworthy is that in the latter two categories, the service provider does not need to possess or accept the digital assets within Singapore. This expansion aims to attract more crypto firms like Coinbase and Ripple to enter the Asian market through Singapore.
Under the revised regulations, DPT service providers must establish trust accounts for customer funds and implement stringent security measures to safeguard these assets. Additionally, they are obligated to adhere to anti-money laundering and counter-terrorism financing regulations, as well as meet user protection and financial stability standards. The updated regulations will be enforced starting April 4, with existing service providers granted a grace period to comply with the new requirements.
Incumbent service providers have a 30-day window to notify MAS and a six-month period to apply for licensing to continue operating in Singapore. As part of the application process, service providers must submit an attestation report from an external auditor validating their compliance history and business operations. This report must be submitted within nine months from April 4, failing which would lead to cessation of operations within the country.
The complete implementation of the amendments is expected by October 4, when the enhanced user protection measures will go into effect. These extensive regulatory changes not only strengthen MAS’s oversight in the crypto industry but also demonstrate Singapore’s commitment to maintaining a safe and conducive environment for both investors and cryptocurrency businesses.