The Monetary Authority of Singapore (MAS) recently made significant changes to its Payments Service Act (PSA) in order to strengthen its oversight and enhance user protection in the cryptocurrency industry. The amendments reflect Singapore’s goal of becoming a cryptocurrency-friendly hub with regulatory frameworks that support innovation while prioritizing investor safety.
One of the key updates to the PSA is the inclusion of three new digital payment token (DPT) services. These services cover custodial services, the facilitation of crypto transfers between accounts and exchanges, and cross-border money transfers. Interestingly, service providers in the latter two categories do not need to have possession of the digital assets in Singapore. This expansion of services demonstrates Singapore’s commitment to attracting crypto firms to establish a presence in the country.
Under the revised regulations, DPT service providers are required to establish trust accounts for customer funds and implement stringent security measures to protect these assets. Additionally, all entities offering these services must comply with anti-money laundering and counter-terrorism financing regulations. These measures are designed to ensure user protection and financial stability within the cryptocurrency ecosystem.
While the amended regulations will officially take effect on April 4, existing service providers have been granted a grace period to comply with the new requirements. These providers must notify MAS within 30 days and apply for licensing within a six-month timeframe to continue their operations in Singapore. Moreover, applications must be accompanied by an attestation report from an external auditor, confirming compliance history and business operations within nine months from April 4. Failure to meet these requirements will result in the cessation of operations in the country.
The full enforcement of the amendments is expected to be completed by October 4, when the enhanced user protection measures will be fully implemented. This timeline allows existing service providers to make the necessary adjustments and demonstrate their commitment to regulatory compliance and user safety.
The evolving regulatory landscape in Singapore highlights the government’s proactive approach to managing the cryptocurrency industry. By introducing new regulations that prioritize user protection and security, Singapore aims to create a conducive environment for crypto firms to thrive while maintaining regulatory oversight. These changes position Singapore as a key player in the global cryptocurrency market and reinforce its reputation as a hub for innovation and financial technology.