Singapore amends Payment Services Act to cover token custody and transfers

The Monetary Authority of Singapore (MAS) announced that it would implement amendments to the country’s Payment Services Act (PS Act) to expand the scope of regulated services related to digital payment token (DPT) service providers. 

On April 2, Singapore’s central bank said it would bring several activities within the scope of the PS Act. This includes providing custodial services for DPTs, facilitating token transfers and exchange and the facilitation of cross-border money transfers.

Excerpt of the amendments to be implemented in Singapore. Source: MAS

The regulator also clarified that the law covers cases even where the service provider does not come into possession of the funds or where the money is not accepted or received in Singapore.

MAS also said that the new updates would allow it to include additional requirements for DPT service providers. MAS wrote:

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

The amendments will be implemented in various stages starting on April 4. According to MAS, transitional arrangements will be provided for entities affected by the expanded scope.

The regulator urged these entities to notify the central bank within 30 days and apply for a license within six months after April 4 if they wish to continue operations while under review.

MAS also announced that noncompliant companies would be shut down. “Entities that do not fulfill the requirements above are required to cease the activities when the amendments come into effect,” it wrote.

Meanwhile, the regulator will also include amendments related to safeguarding customer assets of payment token service providers.

These will cover the segregation of customer assets and placement in a trust account, maintenance of books and records and ensuring protections for the security of customer assets.

The amendments adding protection to user assets will be enacted six months after April 4.

Many crypto companies are acquiring licenses as they offer their services to the Singaporean market. Organizations like Crypto.com, Coinbase and Ripple have obtained complete payment institution licenses in the country.

After completing the requirements, Crypto.com obtained its Major Payment Institution (MPI) license in June 2023. Ripple received the formal approval on Oct. 4, while Coinbase acquired the full MPI license on Oct. 2, 2023.

(Copyright: Cointelegraph Singapore amends Payment Services Act to cover token custody and transfers (cointelegraph.com)