The Monetary Authority of Singapore (MAS) has recently made significant changes to its Payments Service Act (PSA) in order to strengthen its oversight and improve user protection within the crypto industry. These revisions are part of Singapore’s ongoing efforts to establish itself as a crypto-friendly jurisdiction with a strong regulatory framework that encourages innovation while safeguarding investors.
One of the key amendments to the PSA is the inclusion of three new digital payment token (DPT) services, such as custodial services, facilitating the transfer of crypto between accounts and exchanges, and cross-border money transfers. Interestingly, service providers offering the last two services do not need to have possessed or accepted digital assets within Singapore. This broadens the scope of the PSA and allows for greater regulatory oversight of crypto-related activities.
Under the new regulations, DPT service providers are required to establish trust accounts for customer funds and implement stringent security protocols to protect these assets. Additionally, all entities offering these services must comply with strict anti-money laundering and counter-terrorism financing regulations, as well as meet user protection and financial stability requirements. These measures are aimed at safeguarding the interests of investors and ensuring the integrity of the crypto market.
Implementation Timeline
The amended regulations will officially take effect on April 4, with existing service providers being given a grace period to comply with the new requirements. Within 30 days, incumbents must notify MAS of their operations and apply for licensing within a six-month window to continue operating in the country. Moreover, all applications must be accompanied by an attestation report from an external auditor, confirming compliance history and business operations. Failure to meet these requirements within the specified timeframe will result in suspension of operations in Singapore. The full implementation of the amendments is expected by October 4, when the enhanced user protection measures will be fully enforced.
Overall, the revised PSA represents a major step towards strengthening the regulatory framework for crypto activities in Singapore, enhancing investor protection, and promoting the growth of the crypto industry in the region.
