The Monetary Authority of Singapore (MAS) has announced amendments to the regulatory framework governing digital payment token (DPT) service providers under the Payment Services Act (PS Act). These changes covers various activities, such as custodial services, token transfers, and cross-border money transfers, within the regulatory perimeter, even if funds are not physically handled or transactions do not directly involve money entering or leaving Singapore.
MAS seeks to strengthen oversight by imposing additional requirements on DPT service providers, particularly in areas related to anti-money laundering, user protection, and financial stability. The regulatory expansion will be phased in starting April 4, with affected firms required to communicate with MAS within 30 days and obtain a license within six months to maintain operational status.
Entities failing to meet the stipulations will be required to cease operations immediately upon the enactment of these changes. Additionally, MAS plans to introduce further amendments to enhance the safeguarding of customer assets, including rules on asset segregation, safekeeping in trust accounts, and maintenance of detailed records.
Despite the tightening of regulatory controls, Singapore remains an attractive market for crypto companies, as evidenced by Crypto.com, Coinbase, and Ripple obtaining full payment institution licenses. This shows Singapore’s reputation as a crypto-friendly financial hub, with companies continuing to invest and operate within the country’s regulatory framework.
As Singapore strengthens its regulatory oversight, it aims to balance innovation and consumer protection in the rapidly evolving digital payment token landscape.
