MAS Expands Payment Regulation & Protects Digital Payment Token Users

  • April 05, 2024


Payment regulation and protect digital payment token

  1. The Monetary Authority of Singapore (MAS) announced amendments to the Payment Services Act (PS Act) on 2 April 2024. These changes aim to:
  • Expand the scope of regulated payment services under MAS supervision.
  • Introduce user protection and financial stability requirements for digital payment token (DPT) service providers.

The amendments will be implemented in stages starting from 4 April 2024.

    2. The amendments will bring the following activities under the scope of regulation under the PS Act:

    • Provision of custodial services for digital payment tokens (DPTs).
    • Facilitation of DPT transmission and exchange between accounts, including scenarios where the service provider does not hold the DPTs or underlying funds.
    • Facilitation of cross-border money transfers, even if the funds are not received or disbursed in Singapore.

    3. The amendments grant MAS the authority to set requirements for DPT service providers in three key areas: anti-money laundering/countering the financing of terrorism (AML/CFT), user protection, and financial stability.

    4. Transitional arrangements are available for entities already conducting activities that now fall under the expanded scope of the PS Act. These entities have 30 days from 4 April 2024 to notify MAS. To continue these activities temporarily while their license applications are reviewed, they must submit a complete application within six months of the same date.

    The license application must be accompanied by an attestation report from a qualified external auditor, verifying the entity’s business activities and compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) requirements. This report must be submitted within nine months of 4 April 2024.

    5. Non-compliant entities must cease the regulated activities upon implementation of the amendments.

    6. Taking effect six months from 4 April 2024, the amended Payment Services Regulations will introduce new requirements to enhance the protection of customer assets held by digital payment token (DPT) service providers. These measures include:

    • Segregating customer assets and placing them in dedicated trust accounts. This ensures that customer funds are held separately from the DPT service provider’s own assets, offering an additional layer of security.
    • Maintaining accurate and complete books and records. This facilitates transparent accounting and regulatory oversight.
    • Implementing robust systems and controls to safeguard the integrity and security of customer assets. This emphasizes the importance of robust cybersecurity measures to protect customer funds from theft or loss.

    If your company needs help filing taxes for the year 2024, or requires assistance with Singapore incorporation, economy, banking, etc., feel free to call/WhatsApp us at +65 90612851 or email us at Alternatively, you may leave us a reply using our contact form below.

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