Singapore expands digital payment regulation scope, crypto businesses not compliant must cease operations by 4/4
The Monetary Authority of Singapore (MAS) announced on April 2nd that it will revise the Payment Services Act and its accompanying legislation to expand the regulatory scope of payment services. Read more.
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Singapore Tightens Regulation on "Digital Payment Tokens"
The amendment is expected to be implemented in phases starting from April 4, targeting the regulation of Digital Payment Token (DPT) service providers, which includes:
Entities providing DPT custody services.
Facilitating cross-border remittances, even if the funds are not received or paid in Singapore.
Facilitating DPT transfers, exchanges, even if the entity itself does not hold the relevant funds or DPT.
Imposing anti-money laundering, countering the financing of terrorism, user protection, and financial stability requirements on DPT service providers.
The Monetary Authority of Singapore (MAS) stated that it will provide transitional arrangements for entities within the regulatory scope. These entities are required to notify MAS within 30 days after April 4 and submit a license application within 6 months to continue operations during the license review period.
Additionally, entities must submit external audit reports on anti-money laundering and countering the financing of terrorism compliance within 9 months after application. Entities that do not comply must cease relevant activities immediately upon the enforcement of the amendment.
MAS Prohibits Retail Leveraged and Margin Trading, Credit Card Crypto Payments
Former MAS Advisor: Enhancing Regulatory Clarity
In recent months, many cryptocurrency exchanges have obtained licenses or received provisional approvals in Singapore. It is unclear how the expanded regulatory scope in Singapore will impact these developments:
10/2: Coinbase secures a major payment institution license in Singapore, prioritizing the market.
11/16: Paxos receives provisional approval from MAS to launch a new USD stablecoin.
11/17: XREX receives provisional approval for a payment institution license in Singapore, expanding currency support.
3/13: OKX receives provisional approval for a Major Payment Institution License (MPI) from MAS.
However, according to a report by The Block, former MAS Deputy Director of Payment Supervision and current Senior Policy Advisor at TRM Labs, Angela Ang, is optimistic about this:
This amendment, which has been in progress since 2021, will bring much-needed regulatory clarity to Singapore's crypto custody institutions.
Legal advisor Kelvin Low also noted that these regulatory updates were anticipated and if they were to significantly impact crypto businesses, they would have already exited Singapore.