The Monetary Authority of Singapore (MAS) recently unveiled that it is extending its regulatory arm to include a wider range of operations related to digital payment token (DPT) service providers.
Singapore's reach of its oversight will now encompass the provision of custodial services for DPTs, the facilitation of DPT transfers and exchanges, and the facilitation of cross-border monetary transactions, irrespective of whether the funds are received or disbursed within its borders.
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These expansions were introduced as amendments to the Payment Services Act (PS Act), which aims to establish a regulatory regime for payment service providers.
They will give the MAS the authority to set rules about preventing money laundering and terrorism financing, protecting users, and ensuring financial stability.
Angela Ang, a former MAS regulator and current senior policy adviser at blockchain intelligence firm TRM Labs, lauded the amendments:
This is a long-awaited expansion that gives regulatory clarity to key parts of the crypto ecosystem, such as custody services.
The newly imposed regulations require separating customer assets into trust accounts, keeping proper books and records, and implementing effective systems and controls to secure customer assets. The amendments will take effect within six months, starting from April 4.
Furthermore, entities engaged in services under the PS Act's expanded scope must notify MAS within 30 days and apply for a license within six months from April 4. The application should include a verified report on their compliance with anti-money laundering and terrorism financing, completed by a qualified external auditor within nine months from April 4.
Entities that fail to meet these criteria would have to cease their activities when the amendments come into effect.
By imposing comprehensive licensing requirements on custodial services and other crypto activities, the MAS aims to protect users and stabilize the financial system.
In other news, the UK's FCA has extended financial promotion rules to include social media influencers and crypto memes.
