Singapore Expands Regulatory Scope for Digital Payments, Mandating Cease of Operations for Non-Compliant Cryptocurrency Businesses by 4/4
The Monetary Authority of Singapore (MAS) announced on April 2nd that it will revise the Payment Services Act and its subsidiary legislation to expand the regulatory scope of payment services.
Singapore strengthens regulation of “digital payment tokens”
Former MAS advisor: Improving regulatory clarity
Singapore strengthens regulation of “digital payment tokens”
The amendments are expected to be implemented in phases starting from April 4th and will expand the regulatory scope for operators of digital payment tokens (DPT), including:
– Providing custodial services for DPT.
– Assisting in cross-border remittance, even if funds are not received or paid in Singapore.
– Assisting in the transfer and exchange of DPT, even if the operator does not hold the relevant funds or the DPT itself.
– Imposing requirements on DPT service providers regarding anti-money laundering, counter-terrorism financing, user protection, and financial stability.
MAS stated that transitional arrangements will be provided for entities within the regulatory scope. These entities must notify MAS within 30 days after April 4th and submit a license application within 6 months to continue their operations during the license application review period.
In addition, operators are required to submit an externally audited anti-money laundering and counter-terrorism financing compliance report within 9 months after the application. Operators who do not comply must cease relevant activities immediately after the amendments take effect.
( MAS prohibits retail leveraged foreign exchange trading and margin trading, encrypted credit card payments )
Former MAS advisor: Improving regulatory clarity
In recent months, many cryptocurrency exchanges have obtained licenses or received in-principle approvals in Singapore. It is unclear how the expanded regulatory scope in Singapore will affect them:
– 10/2: Coinbase obtains a major payment institution license in Singapore and considers it a priority market.
– 11/16: Paxos receives in-principle approval from MAS and plans to launch a new stablecoin tied to the US dollar.
– 11/17: XREX receives in-principle approval for a payment institution license in Singapore and plans to expand support for various currencies.
– 3/13: OKX receives in-principle approval for a major payment institution license (MPI) from MAS.
However, according to The Block, Angela Ang, former Deputy Director of Payment Oversight at MAS and current Senior Policy Advisor at TRM Labs, is optimistic about these amendments:
– This amendment, which has been in progress since 2021, will bring much-anticipated regulatory clarity to Singapore’s cryptocurrency custodians.
Lawyer Kelvin Low also stated that these regulatory updates were expected, and if they were to impact cryptocurrency companies, they would have already withdrawn from Singapore.
DPT
Cryptocurrency payment
Singapore
