Singapore is set to enhance the regulation of digital payment token (DPT) service providers through significant amendments to the Payment Services Act (PS Act).
Announced by the Monetary Authority of Singapore (MAS), these changes aim to bring a wider array of cryptocurrency-related activities under regulatory oversight, including custodial services, token transfers, exchange facilitation, and cross-border money transfers.
Expanding the Regulatory Framework
Starting April 4, the amendments will gradually be implemented, extending the PS Act’s reach to activities not previously covered.
This broadening of scope is designed to ensure that DPT service providers adhere to stringent standards concerning anti-money laundering, countering the financing of terrorism, user protection, and financial stability.
Transitional Arrangements and Licensing
MAS plans to offer transitional arrangements to entities impacted by the new regulations, requiring them to notify the central bank within 30 days and apply for a license within six months from April 4 if they intend to continue their operations during the review process.
The authority has also made it clear that noncompliant companies will be required to cease operations once the amendments take effect.
Safeguarding Customer Assets
Further amendments are set to introduce measures aimed at protecting customer assets held by payment token service providers.
These measures include requirements for segregating customer assets, maintaining accurate books and records, and ensuring the security of customer assets.
These additional protections are expected to be enacted six months following April 4, underscoring MAS’s commitment to enhancing the safety and reliability of the cryptocurrency sector in Singapore.
Singapore as a Crypto Hub
The move to tighten regulations around cryptocurrency services aligns with Singapore’s ambition to position itself as a leading hub for fintech and digital assets while ensuring a secure and compliant environment.
The acquisition of licenses by prominent crypto companies such as Crypto.com, Coinbase, and Ripple, which have successfully navigated Singapore’s regulatory landscape to obtain complete payment institution licenses, exemplifies the sector’s growing maturity and the city-state’s appeal as a crypto-friendly jurisdiction.
As Singapore continues to refine its regulatory framework for digital assets, these amendments to the PS Act mark a significant step towards safeguarding the interests of both consumers and investors in the rapidly evolving cryptocurrency market.
