Key Takeaways:
- Extended Regulatory Framework: The Monetary Authority of Singapore (MAS) has expanded the Payment Services Act to include more digital payment token (DPT) services such as custodial services, token transfers, and cross-border transactions, with regulations also covering activities beyond Singapore’s borders.
- Enhanced Requirements for DPT Providers: New amendments empower MAS to impose additional requirements on DPT service providers for anti-money laundering, countering terrorism financing, user protection, and financial stability, with a phased implementation starting April 4.
- License Compliance and Customer Protection: Affected entities must notify MAS within 30 days and apply for a license within six months. The regulations also include customer asset safeguards like segregating assets and maintaining secure records, with several leading crypto companies already licensed under the new framework.
The Monetary Authority of Singapore (MAS) has recently made an announcement indicating significant changes to the country’s Payment Services Act (PS Act), aimed at extending the regulatory framework to encompass a wider range of services related to digital payment token (DPT) service providers.
These amendments are set to commence in phases from April 4, with MAS providing transitional arrangements for entities impacted by the changes.
The Monetary Authority of Singapore (MAS) today introduced amendments to the Payment Services Act (PS Act) and its subsidiary legislation to expand the scope of payment services regulated by MAS, and to impose user protection and financial stability-related requirements on…
— Wu Blockchain (@WuBlockchain) April 2, 2024
The amendments specifically target the inclusion of activities such as custodial services for DPTs, facilitation of token transfers and exchanges, and the facilitation of cross-border monetary transactions within the regulatory scope of the PS Act.
MAS emphasizes that these regulations will apply even in instances where the service provider does not physically handle the funds or the transactions do not occur within Singapore’s borders.
The Monetary Authority of Singapore meets next week to discuss policy, but we’re not expecting any changes. @NicholasMapa explains why here ⬇️https://t.co/2RhxoSVCvw
— ING Economics (@ING_Economics) April 2, 2024
A crucial aspect of these updates is the empowerment of MAS to introduce additional requirements for DPT service providers, particularly concerning anti-money laundering (AML), countering the financing of terrorism (CFT), user protection, and financial stability.
The phased implementation of these amendments begins on April 4, with MAS offering transitional arrangements to affected entities.
These entities are required to notify MAS within a 30-day period following April 4 and must apply for a license within six months if they wish to continue their operations during the review process.
Singapore widens crypto regulation, introduces enhanced user protection requirements https://t.co/0h6Ux2dpcG
— The Block (@TheBlock__) April 2, 2024
MAS has also issued a stern warning to entities that fail to comply with the new requirements, stating that non-compliant companies will be compelled to cease operations once the amendments are enacted.
Furthermore, the amendments will introduce regulations aimed at safeguarding customer assets for payment token service providers.
These include measures such as segregating customer assets, placing them in trust accounts, maintaining accurate books and records, and ensuring the security of customer assets.
Singapore expands the scope of its digital-asset rules to cover the custody of tokens as well as more firms involved in fund transfers https://t.co/RvVbGOPKCX
— Bloomberg Crypto (@crypto) April 2, 2024
The enactment of these protective measures is scheduled six months post-April 4.
In the backdrop of these regulatory updates, several crypto companies have been proactive in securing licenses to operate within the Singaporean market.
Notably, prominent organizations such as Crypto.com, Coinbase, and Ripple have successfully obtained complete payment institution licenses.
🌟 Just IN: Monetary Authority of Singapore (MAS) amends Payment Services Act to regulate cryptocurrency (digital payment token, DPT) as part of payment services, enabling oversight on anti-money laundering, counter-terrorism financing, user protection, and financial stability;…
— BitcoinWorld Media (@ItsBitcoinWorld) April 2, 2024
Crypto.com was granted its Major Payment Institution (MPI) license in June 2023, Ripple received formal approval on October 4, and Coinbase acquired its full MPI license on October 2, 2023.
This development underscores Singapore’s commitment to establishing a robust regulatory framework for the crypto and blockchain industry, enhancing both user protection and financial stability within the sector.
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