The Monetary Authority of Singapore (MAS) announced that a new payments law, which regulates various payment types including cryptocurrencies, has come into force today.
Photo credit: Monetary Authority of Singapore
According to MAS, the Payment Services Act (PS Act), which aims to strengthen consumer protection and promote the use of e-payments, is the first comprehensive regulation for financial institutions handling digital payment activities.
It aims to mitigate four key risks in payments: loss of customer money, money laundering, lack of interoperability across payment solutions, and technology risks.
Services regulated under the new act include account issuance, domestic money transfers, cross-border money transfers, merchant acquisition, e-money issuance, money changing, and digital payment token dealing and exchanges.
The new regulation adopts an activity-based licensing framework in recognition of the different kinds of activities and new developments in the payments space. In particular, solution providers will only need one license to conduct specific payment services.
Loo Siew Yee, assistant managing director for policy at MAS, said that this approach, along with the act’s risk-focused regulatory structure, “allows rules to be applied proportionately and to be robust to changing business models.”
There will be three classes of licenses as outlined in the bill’s second reading: a money-changing license, a standard payment institution, and a major payment institution. According to MAS, these classes are “broad enough to deal with the different combinations of payment services” a company may offer.
According to a Bloomberg report, crypto exchange operators Liquid Group and Luno are among the firms looking to apply for licenses. Luno’s Singapore general manager, Sherry Goh, told Bloomberg that the new act “provides regulatory certainty to industry players, but more importantly, it provides consumers with a clear sense of the players they can trust.”
MAS also said that it has started a payments regulatory evaluation program to help payment firms transition into the new act and connect with relevant legal service providers. Its representatives will also conduct workshops on licensing under the PS Act.
Editing by Charmaine de Lazo
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