Singapore updates the Payment Services Act to include token custody and transfers.

The Payment Services Act in Singapore will undergo phased revisions beginning on April 4. According to a statement from the Monetary Authority of Singapore (MAS), more digital payment services will cover by legal regulations.

This includes services such as storing digital tokens for third parties, facilitating token exchanges or transfers, and aiding in international money transfers. This implies that to maintain compliance and safety, more actions using digital payment tokens will governed by regulations.

Additionally, the regulator made it clear that the rule applies in situations in which the money is not received or acknowledged in Singapore or in which the service provider does not come into control of the cash. Furthermore, MAS stated that it would be able to establish more requirements for DPT service providers thanks to the new modifications.

“The amendments will empower MAS to impose requirements relating to user protection, financial stability, countering the financing of terrorism, and anti-money laundering on DPT service providers,” stated MAS in a written statement.

Commencing on April 4, the adjustments will gradually implemented. Transitional provisions will made for entities impacted by the extended scope, according to MAS.

If these organizations want to carry on with their operations while they are being reviewed, the regulator asked them to seek a license within six months of April 4 and notify the central bank within 30 days of that date.

Additionally, MAS declared that noncompliant businesses would close. It stated, “When the amendments take effect, entities that do not comply with the aforementioned requirements must stop their operations.”

Singapore Strengthens Asset Protection in Payment Services Act

The regulator will also make changes in the interim to protect payment token service providers’ client assets. These will address keeping books and records up to date, safeguarding the security of customer assets, segregating client funds, and putting them in a trust account.

Six months after April 4, the amendments providing additional protection for user assets will come into effect. As they cater to the Singaporean market, a growing number of cryptocurrency businesses are obtaining licenses.

Companies such as Coinbase, Ripple, and Crypto.com have all acquired full-payment institution licenses in the nation. In June 2023, Crypto.com granted its Major Payment Institution (MPI) license upon fulfilling the necessary prerequisites. On October 4, Ripple officially approved, and on October 2, 2023, Coinbase obtained the whole MPI license.