FATF praises advanced regulatory measures! Singapore's "Payment Services Act" implemented, bringing more crucial transaction activities under supervision

The Monetary Authority of Singapore (MAS) is updating its digital payment regulatory framework. The Payment Service Act (PSA), introduced in January 2019, has now been officially implemented.

The Monetary Authority of Singapore (MAS) is updating its digital payment regulatory framework. The Payment Service Act (PSA), which was introduced in January 2019, has now officially come into effect.

Digital Payments and Crypto Exchanges Require Licensing

MAS has passed its Payment Services Act, requiring all crypto-related businesses, exchanges, and digital payments operating in Singapore to adhere to current Anti-Money Laundering (AML) and Countering Terrorist Financing (CTF) regulations.

Similar to the Fifth Anti-Money Laundering Directive (AMLD5) that took effect on January 10, the PSA was proposed in January 2019. In the following months, Singapore further solidified its forward-thinking approach to regulating the cryptocurrency industry in Asia.

According to reports, companies have one month from January 28 to register with MAS to indicate that they operate digital payment token (DPT) services in Singapore. After registration, there is a 6-month transition period to apply for a payment institution license.

Assistant Managing Director of MAS, Loo Siew Yee, stated:

The Payment Services Act provides a forward-looking and flexible regulatory framework for the payments industry, and is resilient to the evolving business models. The PSA will promote growth and innovation while mitigating risks and enhancing confidence in the payments space.

Regarding the implementation of crypto regulations, countries around the world are aligning with the latest recommendations from the Financial Action Task Force (FATF), which means that data related to both sides of cryptocurrency transactions will be tracked. MAS has also included regulations in its latest amendments for the exchange of DPT, custody wallets, and brokers facilitating transactions between DPTs.

Malcolm Wright, Head of FATF, stated:

What’s interesting about the Monetary Authority of Singapore is that they are ready to go, they are FATF-ready, in fact, they are more advanced than FATF in some standards.

Increasing Regulatory Costs Lead to Mergers in Europe

Excessive intervention may disrupt emerging industries; in fact, with the introduction of the European Anti-Money Laundering Directive (AMLD5), many blockchain-related companies have begun mergers to cope with the growing regulatory costs.

Cryptocurrency payment provider Bottle Pay based in the UK, for example, announced that it will cease operations in December 2019 due to the EU's anti-money laundering regulations. Similarly, mining pool operator Simplecoin and bitcoin gaming platform Chopcoin also announced closures for the same reasons.

Additionally, the Netherlands-based cryptocurrency derivatives exchange Deribit indicated plans to move to Panama due to AMLD5's stringent regulations on most trading users (in terms of both compliance and costs).