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MAS Enhances Oversight of Crypto Market Through Payment Services Act

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Key points:

MAS expands crypto regulation for better oversight, including custodial and cross-border services. New MAS rules align with global AML/CFT standards, enhancing financial stability and user protection. DPT providers must segregate assets and guard against cyber threats, with guidelines effective from Oct 4.

In an effort to strengthen supervision of the expanding crypto market, the Monetary Authority of Singapore (MAS) has announced a series of amendments to its Payment Services Act and related laws.

The Monetary Authority of Singapore (MAS) has introduced amendments to the Payment Services Act (PS Act) and its subsidiary legislation to broaden the regulation of payment services overseen by MAS, and to impose requirements related to user protection and financial stability.

Apr 02, 2024

Effective April 4th, the regulatory scope will be extended to cover a wider range of digital payment token (DPT) services, including custodial services, facilitating DPT transmissions, and cross-border money transfers, even without funds being received in Singapore.

This regulatory expansion aligns with global standards on anti-money laundering (AML) and countering the financing of terrorism (CFT), while also introducing strong user protection measures and ensuring financial stability in the sector. 

Under the new framework, DPT service providers will now face stricter requirements to protect consumer interests and financial system integrity. This includes the obligation to segregate customers’ assets and maintain accurate records. 

Furthermore, providers must secure customers’ assets against cyber threats and operational risks. These guidelines will be enforced on October 4, marking a significant step in enhancing consumer protection in the digital era.

To facilitate a smooth transition to the enhanced regulatory regime, MAS has outlined transitional arrangements for entities affected by the expanded regulation. This includes notifying MAS within 30 days and submitting a license application within six months of the amendments taking effect. This approach demonstrates MAS’s commitment to ensuring compliance while minimizing disruption to existing DPT service providers.

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