The Monetary Authority of Singapore (MAS) has unveiled plans to revise the nation's Payment Services Act (PS Act), aiming to broaden the regulatory framework concerning digital payment token (DPT) service providers. This announcement, made on April 2, signifies a proactive move by the Bank of Singapore to encompass various activities within the ambit of the PS Act. Among the activities to be included are offering custody services for DPT, facilitating token transfers and exchanges, and enabling cross-border fund transfers.
In a bid to enhance oversight and compliance, MAS clarified that these regulations would apply regardless of whether the service provider owns the funds or if Singapore is involved in the transaction. The proposed amendments empower MAS to impose stringent requirements on DPT service providers concerning anti-money laundering, countering terrorist financing, user protection, and financial stability.
Implementation of these amendments will be carried out gradually, commencing on April 4. The HKMA has outlined transitional arrangements for entities affected by the expanded scope, urging them to notify the central bank within 30 days and apply for a license within six months to continue operations during the review period.
Entities failing to meet the stipulated requirements risk cessation of their activities upon the amendments' enforcement. The regulator aims to ensure compliance and adherence to the updated regulations, emphasizing the importance of safeguarding customer assets held by payment token service providers.
To bolster user asset protection, measures such as asset segregation, trust account maintenance, and enhanced security protocols will be introduced. These amendments are scheduled to come into effect six months following April 4. Several cryptocurrency firms are actively pursuing licenses to operate in the Singaporean market, with notable entities like Crypto.com, Coinbase, and Ripple having already obtained full payment institution licenses.
