The Monetary Authority of Singapore (MAS) announces a new payments law to regulate various payment types, including cryptocurrencies, has been finalized.

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.

According to the announcement, the new regulatory framework aims to mitigate four key risks in payments: loss of customer money, money laundering, lack of interoperability across payment solutions, and technology risks.

The Payment Services Act was first passed in January 2019 and is now enacted. It gives the regulator formal supervisory authority over payments firms, including crypto.

The act covers digital payment token services, which is essentially all crypto businesses and exchanges in the country. It means they will have to comply with anti-money laundering (AML) and counter financing of terrorism (CFT) requirements.

MAS also said that it had started a payment regulatory evaluation program to help firms transition into the new act and connect with relevant legal service providers.

Going forward, crypto companies in the country will be obligated first to register and then apply for a license to operate in the jurisdiction.

PS Act To Help Boost Crypto Adoption In Singapore

Singapore is planning to boost crypto adoption by offering digital service firms the chance to apply for approved operating licenses. As such, the Payment Services Act will likely give global cryptocurrency firms the chance to expand their operations.

It will also move Singapore into a more competitive space with Japan, which has seen 22 cryptocurrency licenses since 2017.

After the PS Act goes into effect on Thursday (Jan. 30), it will serve as detailed regulations for cryptocurrency firms for activities ranging from digital payments to the trading of coins like BTC and ETH.

The increased interest and activity in cryptocurrency has been a double-edged sword, casting more light on the ways crypto can be used for illicit things.

The legislation will let the MAS act in a supervisory manner on issues like cybersecurity, and boost checks on money laundering and terrorism financing.

Will Crypto Firms Comply with PS Act?

It is only a matter of time whether crytpo platforms will adhere to this new rule by MAS. So far, among the firms preparing to apply for licenses are Tokyo-based Liquid Group, Inc. and London-based Luno. Both already operate in Singapore.

In 2019, about 40 % of BTC exchanges stemmed from the Asia-Pacific region, according to data from Chainalysis.

Binance Holdings, one of the world’s largest crypto exchanges, has an office in Singapore, but the firm hasn’t yet revealed whether it would be seeking a license.

Singapore has been attempting to modernize its banking in recent months, with another announcement that it would be offering digital banking licenses.

