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* The Monetary Authority of Singapore (MAS) is up with a new regulatory framework for digital payments.
* The new regulations are FATF ready.
* The PS Act will provide a considerable balance between having a meaningful regulation and attracting new investors towards the crypto business.
The Monetary Authority of Singapore (MAS) announced that they are in-line with updating the regulatory framework for digital payments. As per the Payment Service Act 2019 (PSA), they will start the Digital Payment Token (DPT) services that will all the crypto-based businesses in Singapore under the current Anti- Money Laundering Act (AML) and counter-terrorist financing (CTF) rules.
As per the rule, all the crypto businesses will first have to register their businesses under the act and then they will have to apply for a license to continue their business in Singapore.
Following the rule, all the firms will have a period of one month to register with MAS. In this registration process, they will declare that their business is Singapore-based and they are running a DPT business. Once the registration is done, firms will have six months time during which they need to apply for a payment institution license.
Concerning about the act, MAS’ assistant managing director, Loo Siew Yee said,
“The Payment Services Act provides a forward-looking and flexible regulatory framework for the payments industry.â€
As per him, this regulation that is activity-based and risk-focused will allow rules to be applied proportionately and will adapt properly with the changing business models. Also, the act will be bringing in the possibility of new innovation & growth and reduce the risk associated with digital payments. It will attract and build confidence in investors to start using the DPT’s.
The new regulation is walking hand-in-hand with FATF recommendations
The latest Financial Action Task Force (FATF) recommendations have created a lot of buzz around the globe. These recommendations were made in October 2018 which were updated later in June 2019.
According to FATF’s ‘Travel Rule’ noted in the recommendations, the payment data related to the payer and the beneficiary will travel along with the payment being done.
Malcolm Wright, head of the AML working group at trade group Global Digital Finance who is also a chief compliance officer of Diginex, a Hong Kong-based firm offering institutional-grade infrastructure for digital assets said,
“The most interesting thing about the Monetary Authority of Singapore (MAS) is that it is FATF-ready! MAS has gone a bit further than FATF in terms of some criteria, but at the same time some of the other aspects of it are probably not as far as FATF has intendedâ€
There is always a fear that regulations will harness the innovation in such an upcoming and futuristic space of Crypto. This changes might bring some good mergers and acquisitions activities as firms have to consolidate to meet the increased costs associated with the new regulations.
Apart from other negative noise built around the Crypto business world, David Carlisle, head of community at blockchain analytics firm Elliptic said that the new fifth European Anti-Money Laundering Directive (AMLD5), which came into existence on January 10, will impose “Bread-and-Butter requirements†on all the crypto firms. It includes know-your-customer (KYC) procedures and it will keep an eye on transactions to monitor any suspicious activity. Firms will just have to ensure that they hire an individual to follow the procedure.
As per him, Singapore and Switzerland are two countries that show a proper balance between having meaningful regulations in place and not being prevented from attracting new businesses.