The Monetary Authority of Singapore (MAS) is expanding its regulatory framework for crypto service providers by amending the Payment Services Act. The goal is to improve user protection and safeguard financial stability.
The amendments, announced on Tuesday, will be rolled out gradually, starting on April 4. They will cover custodial services for digital payment tokens (DPTs), facilitation of DPT transmission, and cross-border money transfers, even when funds are not received in Singapore.
With the updated regulations, MAS will be able to impose requirements related to anti-money laundering (AML), countering the financing of terrorism (CFT), user protection, and financial stability on DPT service providers.
Transitional arrangements will be made for entities affected by the expanded regulations. However, affected entities must inform the regulator within 30 days and apply for a license within six months from April 4.
Angela Ang, a senior policy advisor at TRM Labs and former MAS regulator, believes this expansion provides much-needed regulatory clarity for crypto custody players in Singapore.
Kelvin Low, a law professor at the National University of Singapore, suggested that these anticipated changes are unlikely to surprise industry players. Any decisions by crypto exchanges or firms to leave Singapore due to these changes would have been made well in advance.
In addition to regulatory amendments, MAS has issued guidelines outlining consumer protection measures that DPT service providers must follow under the Payment Services Act. These measures include segregating customer assets, maintaining proper records, and ensuring the security of customer assets. The guideline will take effect on October 4.
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