The Monetary Authority of Singapore issued a press release today announcing that the Payment Services Act (PS Act) is now in effect. The law, designed to provide a more effective regulatory framework for Singapore’s payment systems, extends the central bank’s regulatory authority to cover emerging payment systems like digital asset services.
In a published speech, MAS highlighted the need for proper regulation of the digital asset space:
We will be among the first few financial services regulators in the world to introduce a regulatory framework for digital payment token services, or what are commonly understood as cryptocurrency dealing or exchange services.
As we have stated in Parliament before, while there may be some potential in these digital payment token services, they also carry significant money laundering and terrorism financing risks or ML/TF risks due to the anonymous and borderless nature of the transactions they enable. Under the Bill, all providers of digital payment token dealing or exchange services in Singapore will have to meet anti-money laundering and counter financing of terrorism – or AML/CFT requirements.
With the PS Act now in effect, the Money-changing and Remittance Businesses Act and the Payment Systems (Oversight) Act have been repealed.
According to MAS Policy, Payments & Financial Crime Assistant Managing Director Ms Loo Siew Yee, the new law will help to provide more confidence in the payment system and promote growth:
“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.”