Singapore revises Payments Service Act to include cross-border transfers

The Monetary Authority of Singapore (MAS) has significantly amended its Payments Service Act (PSA) to enhance its jurisdiction and bolster user protection within the crypto industry, according to an April 2 statement.

These revisions align with Singapore’s commitment to solidifying its position as a cryptocurrency-friendly hub, underpinned by regulatory frameworks that foster innovation while prioritizing investor protection.

Notably, these moves have made the country a choice destination for several crypto firms, including Coinbase, Ripple, and others looking to expand into the Asia market.

PSA regulation

MAS incorporated three new digital payment token (DPT) services into the PSA, including custodial services, facilitating the transmission of crypto between accounts and exchanges, and cross-border money transfers,

Notably, in the latter two categories, the service provider need not have possessed or accepted the digital assets within Singapore.

Under the new regulations, DPT service providers must establish trust accounts for customer funds and implement robust security protocols to safeguard these assets.

In addition, all entities offering these services must adhere to the strict anti-money laundering and counter-terrorism financing regulations. They also must fulfill user protection and financial stability requirements.

Implementation timeline

The amended regulations will become effective on April 4.

However, the regulator has extended a grace period to existing service providers under a “transitional arrangement.” These incumbents must notify MAS within 30 days and apply for licensing within a six-month window to continue operating in the country.

Furthermore, MAS mandates that any application must be accompanied by an attestation report from an external auditor, verifying compliance history and business operations. This report must be furnished within nine months from April 4.

Failure to meet the stipulated requirements within the designated timeframe will result in cessation of operations within the country. The full effectuation of the amendments is anticipated by October 4, when the enhanced user protection measures will come into force.

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