The Monetary Authority of Singapore (MAS) has significantly amended its Payments Service Act (PSA) to expand its jurisdiction and strengthen user protections within the crypto industry, according to an April 2 statement.
These revisions are in line with Singapore’s commitment to cement its position as a cryptocurrency-friendly hub, supported by regulatory frameworks that promote innovation while prioritizing investor protection.
These moves have notably made the country a destination of choice for several crypto companies including Coinbase, Ripple and others looking to expand into the Asian market.
PSA regulation
MAS has included three new digital payment token services (DPT) in the PSA, including custodial services, which facilitate the transfer of crypto between accounts and exchanges, and cross-border money transfers.
Particularly in the last two categories, the service provider is not required to own or have accepted the digital assets in Singapore.
Under the new regulations, DPT service providers must establish trust accounts for customer funds and implement robust security protocols to protect these assets.
In addition, all entities offering these services must adhere to strict regulations aimed at combating money laundering and the financing of terrorism. They must also meet user protection and financial stability requirements.
Implementation timeline
The amended regulations will come into effect on April 4.
However, the regulator has extended a grace period for existing service providers under a ‘transitional arrangement’. These incumbents must notify the MAS within 30 days and apply for a license within a period of six months to continue operating in the country.
In addition, MAS requires that each application be accompanied by an attestation report from a third-party auditor verifying compliance history and business operations. This report must be submitted within nine months from April 4.
Failure to comply with the stated requirements within the specified time frame will result in the cessation of operations in the country. The full entry into force of the changes is expected on October 4, when the enhanced user protection measures will come into effect.
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