Violet Vallaya
The Monetary Authority of Singapore (MAS) has taken significant steps to enhance the regulatory framework for digital payment tokens.
In an announcement Tuesday, MAS revealed amendments to the Payment Services Act and its subsidiary laws, aimed at broadening the range of payment services subject to regulation.
Key Changes
The amendment primarily focuses on imposing user protection and financial stability-related requirements on Digital Payment tokens (DPT) service providers. Here are the key changes:
- Expanded Regulatory Scope: The revised rulebook now covers service providers involved in the transfer or exchange of tokens, even if they do not directly handle the associated cash or coins. Additionally, businesses facilitating international transfers fall under the act, regardless of whether the funds are received or accepted within Singapore.
- Effective Date: The new regulations will take effect from April 4, 2024. Companies operating within the expanded scope must comply with the requirements outlined by this date.
- Transitional Arrangements: To facilitate a smooth transition, MAS will provide “transitional arrangements” for entities affected by the regulatory changes. These arrangements allow businesses to adjust their operations while adhering to the new rules.
- License Application: Service providers falling within the expanded scope must notify the regulator within 30 days and submit a license application within six months from April 4. Failure to do so may result in cessation of operations.
Anti-Money Laundering and Counter-Terrorism Financing
MAS emphasizes that the amendments serve a dual purpose: safeguarding users and maintaining financial stability. By extending regulatory oversight to a wider range of payment services, MAS aims to prevent illicit activities such as money laundering and terrorism financing.
Singapore’s crypto landscape has witnessed both growth and challenges. In 2022, the city-state faced turbulence due to unrestricted crypto speculations, particularly on platforms like the defunct FTX Derivatives Exchange. As a response, authorities have proactively introduced measures to regulate custody services and other crypto-related transfers.
