Expert Investor
Author: Anatol Antonovici
Senior Reporter
Anatol Antonovici

Singapore Introduces Regulatory Framework That Deals With Crypto Businesses

Cryptocurrency companies operating in Singapore will have to register and get a license in order to continue their business in the financial hub. The new conditions are stipulated in the Payment Services Act (PS Act), which was announced on Tuesday by the Monetary Authority of Singapore (MAS).

New Law Has Two Facets

The PS Act, which came into effect on January 28, will tighten regulation on cryptocurrency firms, but it will also allow global companies to expand their business in Singapore in a legal and convenient manner.

The MAS, which acts both as the central bank and the main financial regulator in Singapore, requires crypto firms to register and be licensed.

The PS Act was first passed in January 2019. It gives the MAS the right to monitor all payment services in the country. While the new law came into force on Tuesday, existing companies have one month to register their businesses. Next, they will have another six months to apply for a license that will give them the status of a payment institution.

Last year, Singapore’s minister of education Ong Ye Kung, stated:

We will be among the first few financial services regulators in the world to introduce a regulatory framework for digital payment token services, or what is commonly understood as cryptocurrency dealing or exchange services.

Now that the PS Act took effect, the Money-changing and Remittance Businesses Act and the Payment Systems Act are repealed.

PS Act Might Help Singapore Become Crypto Hub

Singapore is regarded as one of the largest financial hubs in the world and the largest one in Asia after Hong Kong. Besides this, the small country is one step closer to become a cryptocurrency hub as well.

The new law enables global crypto companies to expand their operations in Singapore by applying for operating licenses. The PS Act is a comprehensive regulatory framework that touches upon all aspects of crypto businesses, including money laundering and terrorism financing issues.

The great thing about the PS Act is that it clearly defines the scope of emerging and innovative payments activities, including cryptocurrency exchanges and e-wallets.

Some crypto-oriented firms, including Liquid Group and London-based Luno, are already planning to apply for the licenses. Both companies are already present in Singapore.

Liquid’s CEO Mike Kayamori said that his firm was welcoming the Act with open arms. He revealed that Liquid would apply through its local subsidiary Quoine.

Elsewhere, Sherry Goh of Luno said that the legislation offered regulatory certainty to industry players. Also, customers will be able to choose which crypto service to trust.

Indeed, the new law will enhance consumer protection and boost confidence in the use of electronic payments and crypto services.

Loo Siew Yee, Assistant Managing Director at MAS, said in the official statement:

The Payment Services Act provides a forward-looking and flexible regulatory framework for the payments industry. The activity-based and risk-focused regulatory structure allows rules to be applied proportionately and to be robust to changing business models. The PS Act will facilitate growth and innovation while mitigating risk and fostering confidence in our payments landscape.

Meet The Author
Anatol Antonovici
Anatol Antonovici
Senior Reporter

Anatol has been writing for our news site for a year and is the newest member of our team. While he’s new to us, he’s certainly not new to trading with over 10 years’ experience being a professional financial journalist and working in the markets.

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