MAS implements stricter guidelines for service providers

The Monetary Authority of Singapore has done that introduced changes to the Payment Services Act, which point to a broader regulatory framework. These changes, which will take effect in phases from April 4, mark a significant shift in the landscape for companies operating in the crypto sector.

Consumer Protection Guidelines

The changes include a range of measures, including custodial services for digital payment tokens (DPTs), facilitating the transfer of DPTs, and cross-border money transfers.

The regulations specifically extend to activities involving funds from outside Singapore. This expanded regulatory authority “authorizes” the Monetary Authority of Singapore (MAS) to impose stringent requirements on DPT service providers, signaling a “proactive” approach to mitigating risks associated with digital assets, the report said. MAS commented:

The amendments will give MAS the power to impose requirements relating to anti-money laundering and countering the financing of terrorism, user protection and financial stability on DPT service providers.

At the same time, the MAS issued guidelines which sets out the consumer protection requirements for DPT service entities. These guidelines are expected to come into effect on October 4.

The measures laid out include the segregation of customer funds, rigorous record-keeping practices and “robust security protocols to protect customer assets from potential threats.”

As Singapore’s crypto regulatory landscape has evolved, recent developments underline authorities’ efforts to create a “safe and transparent” environment for digital asset transactions.

In particular, the regulatory updates coincide with broader efforts to strengthen the country’s position as a fintech hub, balancing innovation with risk management to safeguard investors’ interests and maintain financial integrity.

Singapore’s approach to crypto regulation

Singapore’s position on digital currency regulation reflects a balancing act between supporting innovation and managing risks. While the country has actively appealed to crypto companies to set up shop within its borders, regulatory scrutiny has intensified as the sector grows.

Singapore for example has granted an in-principle approval to global crypto exchange OKX for a Major Payment Institution (MPI) license. The The European crypto exchange Bitstamp also made headlines by announcing the receipt of an In-Principle Approval (IPA) license in Singapore.

As reported by Bitcoinist, this move sends a clear message that Singapore is open to crypto business, but only for those who play by the rules.

Recent initiatives, such as the proposed improvements to user protection requirements and restrictions on retail speculationunderline Singapore’s efforts in crypto governance.

The global crypto market cap on TradingView
The global market cap value for digital currencies on the 1-day chart. Source: Crypto TOTAL Market Cap

Featured image from Unsplash, chart from Tradingview

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