Crypto Landscape Transforming as Singapore Amends Payment Services Act

By: Isha Das

The Monetary Authority of Singapore (MAS) has made significant revisions to its Payments Service Act (PSA). The amendments, announced on April 2nd, reflect Singapore's growing influence as a cryptocurrency-friendly hub, helmed by legislation that promotes innovation while safeguarding investors. The revisions have made the country a choice destination for multiple crypto firms aspiring to extend to the Asian market, including giants like Coinbase and Ripple.

The enhanced PSA now incorporates three new digital payment token (DPT) services. These include custodial services, facilitation of crypto transfers between accounts and exchanges, and cross-border money transfers. Intriguingly, service providers dealing with the latter two categories need not have owned or accepted the digital assets within Singapore.

Under the revised regulations, DPT service providers must create trust accounts for customer funds and install solid security measures to safeguard these assets. All such entities should align with stringent Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations and satisfy user protection and financial stability prerequisites.

The updated regulations will go into effect on April 4. MAS has provided a transition period for existing service providers, who must notify MAS within a month and apply for licensing within a six-month period to continue operations in the country. Non-compliance may result in termination of operations in Singapore. The full effectuation of changes is expected by October 4.