The Monetary Authority of Singapore (MAS) has recently made significant amendments to its Payments Service Act (PSA) in a bid to boost user protection and strengthen its jurisdiction within the cryptocurrency industry, as announced in a statement on April 2. These revisions are in line with Singapore’s goal of solidifying its position as a cryptocurrency-friendly hub, supported by regulatory frameworks that encourage innovation while also prioritizing investor protection.
As a result of these changes, Singapore has emerged as a preferred destination for numerous crypto firms, such as Coinbase and Ripple, that are seeking to expand their presence in the Asian market. MAS has introduced three new digital payment token (DPT) services under the PSA, including custodial services, facilitating crypto transactions between accounts and exchanges, and facilitating cross-border money transfers. Notably, for the last two services, the provider does not need to possess or accept digital assets within Singapore.
Under the updated regulations, DPT service providers are required to establish trust accounts for customer funds and implement robust security measures to protect these assets. Additionally, all entities offering these services must comply with strict anti-money laundering and counter-terrorism financing rules, as well as meet user protection and financial stability standards. These amendments will go into effect on April 4, with existing service providers being granted a grace period under a transitional arrangement.
Existing service providers must inform MAS of their operations within 30 days and apply for licensing within a six-month period to continue operating in Singapore. Moreover, any application for licensing must be accompanied by an attestation report from an external auditor, confirming compliance history and business practices. This report must be submitted within nine months from April 4. Failure to meet these requirements within the specified timeframe will result in the cessation of operations in Singapore.
The full implementation of these amendments is expected by October 4, when the enhanced user protection measures will be put into effect. The changes introduced by MAS reflect a proactive approach to regulating the cryptocurrency industry, aimed at balancing innovation and investor protection in Singapore’s evolving financial landscape. By enhancing its regulatory framework, MAS seeks to foster a conducive environment for crypto businesses to thrive while safeguarding the interests of investors and consumers alike.
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