Singapore enacts new payments law affecting crypto companies

The Monetary Authority of Singapore (MAS) announced today that the Payment Services Act (PS Act) took effect with the goal of increasing consumer protection with electronic payments. The new act expands the MAS's regulatory scope to include digital assets. Companies will need to register and apply for a license in order to operate a Digital Payment Token (DPT) business in Singapore. It is not overarching but rather provides three different licenses including a money-changing license, a standard payment institution, and a major payment institution for which companies can choose one.

Why it matters

• Increased regulation can cause undue burden to companies. After Europe instituted AMLD5, a similar compliance measure, companies such as Deribit and KyberSwap were forced to relocate while others shut down altogether.
• Last year, the international organization FATF (Financial Action Task Force) released new recommendations for crypto companies. While FATF does not have the authority to punish companies, they pressure governments to do so by threatening to blacklist countries that are not abiding by their rules. This can seriously damage their standing in the global economy by warding off foreign investment and disrupting capital flows. In order to remain FATF compliant, we will likely see more governments enact policies such as The PS Act.