Singapore amends Payment Services Act to include cross-border transfers

Singapore’s new cryptocurrency regulations will come into effect in phases from April 4.

According to an April 2 statement, the Monetary Authority of Singapore (MAS) has significantly amended its Payment Services Act (PSA) to enhance its regulatory decision-making powers and enhance user protection in the cryptocurrency industry.

These modifications are in line with Singapore’s commitment to solidifying its position as a cryptocurrency hub. The location is supported by a regulatory framework that simultaneously promotes innovation and prioritizes investor protection.

It is important to note that these moves may result in these countries becoming the destination of choice for several cryptocurrency companies, including Coinbase, Ripple and others looking to expand into the Asian market.

PSA Supervision

MAS incorporates three new digital payment token (DPT) services into the PSA, including custody services, facilitating cryptocurrency transfers between accounts and exchanges, and cross-border currency remittances.

Of particular note is that in the latter two categories, service providers are not required to own or accept digital assets in Singapore.

Under the new regulations, DPT service providers must establish trust accounts for client funds and implement strong security protocols to protect these assets.

In addition, all entities providing these services must comply with strict anti-money laundering and counter-terrorism financing laws. They must also meet user property protection and financial stability requirements.

ImplementationTimetable

The revised regulations will take effect on April 4.

However, the regulator has extended the grace period for existing service providers under "transitional arrangements". These existing service providers must notify MAS within 30 days and apply for a license within six months to continue operating in the country.

Additionally, MAS stipulates that any application must be accompanied by an attestation report from an external auditor to verify compliance history and business operations. The report must be provided within nine months from April 4.

Failure to meet the specified requirements within the specified time will result in the suspension of operations within the country. The revisions are expected to be fully effective on October 4, when enhanced user protection measures will come into effect.

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