Singapore's new remittance law invites crypto firms
As indicated by MAS, the Payment Services Act (PS Act), which plans to reinforce protection for consumers and encourage the utilization of digital payments, is the first extensive set of legal guidelines for banks and other financial institutions that handle online money transfers.
The goal of the new legislature is to moderate four primary risks when handling monetary transfers: loss of customer’s funds, money laundering, absence of interoperability across services, and technology risks. The new guidelines outline rules for services such as merchant acquisition, domestic and cross-border monetary transfers, account insurance, digital payment token sales and exchanges, and digital currency exchange.
The law implements a licensing structure based on what activities the business conducts and providers will need to acquire a particular license for the type of service they intend to provide.
Loo Siew Yee, the assistant managing director at MAS, said that this methodology, alongside the act’s risk-centered administrative structure, “allows rules to be applied proportionately and to be robust to changing business models.”
The Act outlines the issuance of three types of licenses: one for exchanging money, a license for standard payment institutions, and one for major payment institutions. As indicated by MAS, these types are “broad enough to deal with the different combinations of payment services” that an organization may offer.
As indicated by a Bloomberg report, cryptocurrency trade operators Liquid Group and Luno are among the companies seeking licenses and will be among the first to apply. Luno's Singapore general manager, Sherry Goh, disclosed to Bloomberg that the new legislature “provides regulatory certainty to industry players, but more importantly, it provides consumers with a clear sense of the players they can trust.”
MAS additionally said that it has begun an initiative that will to aid payment firms in the transition to the new legal guidelines and partner with appropriate legal specialist organizations. The Authority’s agents will likewise lead workshops on licensing guidelines under the PS Act.