Singapore Strengthens Consumer Protection With New Payment Services Act

The regulatory framework for digital payments in Singapore is getting an update from the Monetary Authority of Singapore (MAS), the regulator said in a press release on 28 January.

According to the announcement, the new Payment Services Act 2019 (PSA) requires that cryptocurrency payments and trading enterprises follow the current anti-money laundering (AML) and counterterrorist-financing (CTF) rules. Crypto-related businesses will also have to apply for a license to operate in the jurisdiction, and comply with the Financial Advisers Act, Insurance Act, Securities and Futures Act and the Trust Companies Act.

Firms, which are based in Singapore and are operating a Digital Payment Token (DPT) business, will have a month, starting 28 January, to register with the MAS. Once register, they will have a six-month period, in which to apply for a payment institution license.

Loo Siew Yee, MAS’ Assistant Managing Director, said in a statement:

“The Payment Services Act provides a forward-looking and flexible regulatory framework for the payments industry. The activity-based and risk-focused regulatory structure allows rules to be applied proportionately and to be robust to changing business models. The PS Act will facilitate growth and innovation while mitigating risk and fostering confidence in our payments landscape.”

According the announcement, the new Act has the goal of enhancing the regulatory framework for payment services in Singapore, strengthen consumer protection and promote confidence in the use of e-payments.

Singapore’s regulatory framework seems to be attracting foreign businesses to the country as well. Last week, Australia’s largest cryptocurrency exchanges, the Independent Reserve, announced that it has expanded its services to Singapore, a move which was influenced by the introduction of the PS Act. Adrian Przelozny, CEO and founder of Independent Reserve, said at the time:

“Following a number of positive moves by Singaporean regulators, including the introduction of the Payments Services Act by the Monetary Authority of Singapore (MAS), we felt the time was right to make this move.”

With the increase of regulations in the cryptocurrency space, many jurisdictions around the world have started setting up licensing requirements for crypto-related businesses. The most famous of all is New York’s BitLicense, which the New York Department of Financial Services amended for the first time in five years.