Singapore MAS Expands Payment Services Act to Cover Broader Digital Payment Token Providers

Singapore's Monetary Authority expanded the scope of the Payment Services Act on 4 April 2024, bringing a wider range of digital payment token service providers, as well as cross-border money transfer facilitators, within its licensing regime; the amendments, announced on 2 April, take effect in stages. The amendment requires firms providing DPT services — including custodians and entities that facilitate the transfer of digital tokens — to obtain MAS authorisation even where they do not come into possession of customers' money or tokens.

AML/CFT AND USER PROTECTION

MAS said the amendments empower it to impose anti-money laundering and countering the financing of terrorism, user protection and financial stability requirements on DPT service providers. The FATF Travel Rule requires virtual asset service providers to collect, verify, and transmit originator and beneficiary information when transferring digital assets above a specified threshold, mirroring the information-sharing obligations long applied to traditional wire transfers.

TRANSITIONAL ARRANGEMENTS

Firms already conducting the newly regulated activities must notify MAS within 30 days and submit a licence application within six months of 4 April 2024 if they wish to keep operating temporarily while MAS reviews their applications, with an external auditor's AML/CFT attestation due within nine months. The licensing process requires applicants to demonstrate adequate anti-money laundering and countering the financing of terrorism controls, meet fit-and-proper standards for key personnel, and maintain appropriate risk management frameworks.