MAS expands regulations for digital payment token service providers

It will impose requirements for anti-money laundering and user protection.

The Monetary Authority of Singapore has amended the Payment Services Act (PS Act) to expand the scope of payment services it regulates in digital payment token (DPT) service providers.

With this, MAS will be able to impose requirements relating to anti-money laundering and countering the financing of terrorism, user protection and financial stability on DPT service providers.

The amendments will take effect in stages starting from 4 April.

Amongst amendments include a provision of custodial services for DPTs; facilitation of the transmission of DPTs between accounts and facilitation of the exchange of DPTs, even where the service provider does not come into possession of the moneys or DPTs; and facilitation of cross-border money transfer between different countries, even where money is not accepted or received in Singapore. 

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MAS will review the licence applications of entities classified as DPTs. Transitional arrangements will be provided for entities currently conducting activities under the PS Act’s expanded scope. 

These entities are required to notify MAS within 30 days and submit a licence application within six months from 4 April 2024, if they wish to continue the activities on a temporary basis.

The application must be accompanied by an attestation report of the entity’s business activities and compliance with anti-money laundering and countering the financing of terrorism requirements, duly completed by a qualified external auditor, within nine months from 4 April, MAS said.

 Entities that do not fulfill the requirements above are required to cease the activities when the amendments come into effect.