The Monetary Authority of Singapore (MAS) has made substantial changes to the Payments Service Act (PSA) in order to extend its regulatory reach and provide better consumer protection in the cryptocurrency sector, as reported in a statement on April 2.

These adjustments reflect Singapore's dedication to establishing itself as a crypto-friendly environment, supported by a regulatory framework that encourages innovation while prioritizing safeguarding investors.

These changes have positioned the country as an appealing destination for numerous crypto companies, including Coinbase and Ripple, interested in expanding into the Asian market.

Regulatory Updates

MAS has integrated three new digital payment token (DPT) services into the PSA, covering custodial services, facilitating crypto transfers between accounts and platforms, and cross-border money transfers.

Of particular note is that for the latter two services, the provider is not required to hold or accept digital assets in Singapore.

Under the new guidelines, DPT service providers are mandated to set up trust accounts to protect customer funds and enforce stringent security measures to ensure the safety of these assets.

Additionally, all firms offering these services must comply with anti-money laundering and counter-terrorism financing regulations while meeting requirements for user protection and financial stability.

Timeline for Implementation

The revised regulations are set to take effect on April 4.

However, existing service providers have been granted a transition period during which they must inform MAS within 30 days and apply for licensing within a six-month timeframe to continue operating in Singapore.

MAS has stipulated that all applications must be accompanied by an attestation report from an external auditor attesting to compliance history and business operations, with a deadline of nine months from April 4.

Failing to meet these specified requirements within the allocated period will result in a halt to operations in the country. The amendments are expected to be fully enforced by October 4, when the enhanced user protection measures will be enforced.