The Monetary Authority of Singapore, MAS enforces New AML Crypto Regulations (Payment Services Act) which has come into force. All crypto companies operating in the country have to be registered and licensed. MAS said the new law would strengthen consumer protection and promote trust in the use of electronic payments
29 January, 2020 | AtoZ Markets – Singapore is one of Asia’s favorable jurisdictions for crypto and other digital payments. The government is also boosting the sector by bringing favorable regulations. Besides, the Singapore regulator MAS enforces AML crypto regulations (Payment Services Act). The regulations were first approved in January 2019. It gives the regulator formal supervisory authority over payments firms, including crypto.
MAS Enforces New Crypto Payment Services Act
Singapore’s new payment law has come into force on January 28. It requires all crypto companies operating in the country to be registered and authorized. The law covers “digital payment token (DPT) services,” in fact all crypto companies and exchanges in the country. Now, all crypto companies will have to comply with anti-money laundering (AML) and counter financing of terrorism (CFT) requirements.
MAS believes that cryptocurrencies involve significant money laundering risks due to their anonymous and borderless nature of transactions. Therefore, all crypto firms will have to be authorized to operate in the country.
However, the law does not impose uniform licensing requirements. It adopts an activity-based licensing framework for different kinds of activities that firms undertake and the risks they pose. The Payment Services Act provides three classes of licenses:
- Money-changing license,
- Standard payment institution, and
- Major payment institution.
Loo Siew Yee, assistant managing director of MAS, told:
Each service provider can hold only one of the three licenses. The PSA (Payment Services Act) will facilitate growth and innovation by mitigating risks and promoting trust in our payment landscape.”
Payment Services Act is FATF-Ready
As for the implementation of the crypto regulations, countries around the world are following the latest Financial Action Task Force (FATF) recommendations. The recommendations first made in October 2018 and then updated in June 2019. Malcolm Wright, head of the AML Working Group at trade group Global Digital Finance, said:
“The interesting thing about the Monetary Authority of Singapore is that, in a sense, the PSA is FATF-ready. They came out the door for the first time with a consultation in July. We are proposing it in terms of the implementation of the PSA, as it relates to sending origination and beneficiary information.”
MAS also launched a consultation shortly before Christmas, adding some changes to the PSA regarding digital assets for aligning Singapore with the FATF. The amendments expand the rules to include the transfer of DPTs, the provision of safekeeping wallets for or on behalf of clients and the brokering of DPT transactions.
Singapore has now become one of the few regions to have regulatory clarity for crypto companies. Japan has been regulating the crypto product sector since 2017 through its Payment Services Act. Earlier this month, the EU region also implemented its fifth Anti-Money Laundering Directive (AMLD5). However, the directive has led to the closure of some crypto companies, and some have moved their activities outside the EU.
However, MAS believes that its new law will strengthen consumer protection and promote confidence in the use of electronic payments.
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