Singapore Updates Payment Services Act to Include Token Custody & Transfers

In a recent development, the Monetary Authority of Singapore (MAS) has announced significant amendments to the nation’s Payment Services Act (PS Act) aimed at broadening the regulatory framework surrounding digital payment token (DPT) service providers.

MAS Expands Regulatory Oversight

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

Additionally, this regulatory framework applies when a service provider does not possess funds or fails to receive or accept funds within Singapore. It also said that the new updates would allow the central bank to include additional requirements for DPT service providers. MAS wrote:

“The amendments will empower MAS to impose obligations on DPT service providers in the areas of anti-money laundering and counter-terrorism funding, user protection, and financial stability.”

The amendments will be implemented in various stages starting on April 4. Transition arrangements will accommodate the expanded scope. Such entities must notify MAS within 30 days and submit a license application within six months from April 4 if they wish to continue the activities temporarily while MAS reviews their license applications.

MAS also announced that it would shut down non-compliant companies. They wrote that entities not fulfilling the requirements above must cease their activities when the amendments come into effect.

The regulator will also include changes about safeguarding customer assets of payment token service providers. These include segregation of customer assets and placement in a trust account, maintenance of books and records, and protections for the security of customer assets. After April 4, the amendments adding protection to user assets will be enforced within six months.

Crypto Firms Navigate Compliance in Singapore

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 got its Major Payment Institution (MPI) license in June 2023. However, Ripple received formal approval on October 4. Coinbase achieved a full MPI license two days earlier, on October 2, 2023.

However, OKX, one of the world’s largest crypto exchanges, is seeking a license in Hong Kong. OKX is anticipated to bring a track record of successfully enabling the trade of digital assets to the table.

Hong Kong is quickly positioning itself as a crypto-friendly region. Its reasonably clear legislative framework has recently captured the interest of numerous crypto-based organizations searching for a favorable environment to grow their blockchain and digital asset businesses.

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