Cryptocurrency Included In Monetary Authority Of Singapore’s New Payment Service Regulations

News, Regulation | November 20, 2018 By:

The Monetary Authority of Singapore (MAS), the country’s central bank, has finalized the new regulatory framework for payment service providers.

The new Payment Services Bill (PSB), moved by MAS board member and education minister Ong Ye Kung for its first reading in Parliament, will expand the scope of regulated payment services in a move to better safeguard consumers’ money, counter terrorism financing and boost cybersecurity measures. It will streamline payment services under a single legislation by combining the Payment Systems (Oversight) Act (PS(O)A) and the Money-Changing and Remittance Businesses Act (MCRBA).

The bill comprises two parallel regulatory frameworks. The first one is the Designation Framework for Significant Payment Systems that will enable MAS to designate significant payment systems and regulate operators, settlement institutions and participants of these designated payment systems for financial stability reasons as well as for efficiency reasons.

The second framework, Licensing Framework for Payment Service Providers, will allow MAS to regulate the provision of payment services. It will regulate seven payment services, including account issuance service, domestic money transfer service, cross border money transfer service, merchant acquisition services, e-money issuance service, digital payment token service and money-changing service. According to the framework, crypto exchanges and other services will be required to hold a license.

“A payment service provider may apply to be a money-changing licensee, standard payment institution or a major payment institution. Money-changing licensees can conduct only money-changing services,” the bill said. “Standard payment institutions may conduct any combination of regulated activities that are below specified thresholds. Both will be regulated primarily for ML/TF risks. Only major payment institutions may carry out payment services above specified thresholds, and will be regulated more comprehensively.”

The MAS will allow up to 12 months for payment service providers to comply with the changes after the new Act is in force. Those who provide a platform to allow persons to exchange digital payment tokens will be given six months to comply.