In a significant regulatory shift, the Monetary Authority of Singapore (MAS) has announced comprehensive amendments to the country’s Payment Services Act (PS Act), targeting the rapidly evolving digital currency sector. This change aims to broaden the regulatory net, covering various activities within the domain of digital payment token (DPT) services, including custodial services, token transfers, and cross-border money movements.
The MAS’s revision extends the act’s reach, ensuring that even transactions not directly handled within Singapore or by entities not physically holding the funds fall under the law. This initiative underscores Singapore’s commitment to a robust regulatory framework, addressing anti-money laundering, terrorism financing, user protection, and financial stability concerns for DPT service providers.
The enforcement of these amendments is set to commence on April 4, with a phased approach to implementation. The MAS has laid out transitional provisions for existing entities to adapt to the new regulations, requiring them to notify the central bank within 30 days and to secure a license within six months from the initiation date to continue their operations.
The regulator has also made it clear that entities failing to meet the new requirements will face closure, marking a strict stance against non-compliance. Furthermore, the updates will introduce mandates for safeguarding customer assets, including asset segregation, trust account placements, and the maintenance of comprehensive records to enhance the security of customer assets. These protective measures are scheduled to take effect six months following the amendment’s commencement.
Singapore’s rigorous approach has already seen prominent crypto platforms like Crypto.com, Coinbase, and Ripple securing full payment institution licenses, demonstrating the country’s attractiveness as a regulated hub for digital finance. With these amendments, Singapore not only enhances its regulatory framework but also sets a precedent for global standards in the management and oversight of digital currencies.