Singapore requires cryptocurrency-based businesses in the country to register and obtain a license with the Monetary Authority of Singapore (MAS). This commenced from the 28th January 2020. This new law is coming shortly after the commencement of a Payment Services Act (PS Act) geared towards enhancing customer protection and promoting the confident use of electronic payments, according to MAS publication on January 28, 2020.
Payment Services Act Commences in Singapore
Per the publication, the Payment Services Act (PS Act) has commenced in Singapore. Hence, digital payment businesses, including crypto companies must register with MAS. This is the country’s central bank and should be done within a month to provide payment services. Businesses must apply for a payment institution license within six months of grace given to them.
Furthermore, the PS Act targets improving the regulatory framework for payment services in Singapore. In line with that, it will strengthen customer protection. And at the same time, build confidence in people to use digital payments, according to MAS.
PS Act Was Created After Dialogues with the Industry
The financial regulatory authority outlines that the PS Act was designed after close dialogues and public consultations with the payments industry. Accordingly, MAS has launched a Payments Regulatory Evaluation Programme (PREP) that will connect payment services firms with legal service providers. This is in a bid to facilitate the smooth transition of payment services firms to the PS Act, it said.
On the other hand, Ms. Loo Siew Yee, Assistant Managing Director (Policy, Payments & Financial Crime), MAS also explained the aim of the new rules. According to Yee, the Payment Services Act helps to provide a “forward-looking and flexible regulatory framework,” tailored to the payments industry.
“The activity-based and risk-focused regulatory structure allows rules to be applied proportionately and to be robust to changing business models. The PS Act will facilitate growth and innovation while mitigating risk and fostering confidence in our payments landscape,” Yee said.
PS Act Was Passed in January 2019
Reportedly, the PS Act was passed in January 2019 and classifies Digital Payment Token (DPT) services under the existing anti-money laundering (AML) and counterterrorist-financing (CTF) rules. The PS Act can also be compared to the Fifth European Anti-Money Laundering Directive (AMLD5).
While these rules targets defining the regulatory framework for cryptocurrencies in their respective regions, criminal use of cryptocurrencies inspired them. In the future, the Financial Action Task Force’s (FATF) Transfer Rule may be implemented and it will require exchanges revealing the identity of the sender and recipient of crypto payments.