Policy Briefing — Singapore Commences Payment Services Act Amendments
Singapore’s Monetary Authority announced the commencement of Payment Services Act amendments on 2 April 2024, expanding regulation of digital payment token intermediaries and introducing stablecoin segregation, safeguarding, and reporting duties.
Executive briefing: The Monetary Authority of Singapore (MAS) confirmed on 2 April 2024 that key provisions of the Payment Services (Amendment) Act 2021 and subsidiary legislation will commence from 4 April 2024. The amendments widen the regulatory perimeter for digital payment token (DPT) service providers, impose custodial segregation and safeguarding requirements, and set conduct standards for single-currency stablecoin issuers.
Key obligations
- Expanded scope. DPT service providers covering custodial services, cross-border money transfer, and facilitation of DPT transmissions must now be licensed.
- Safeguarding assets. New regulations require DPT custodians to segregate customer assets, maintain trust accounts, and implement reconciliation controls.
- Risk management. Licensees must establish policies for technology risk, anti-money laundering/counter-terrorist financing (AML/CFT), and conduct annual audits.
- Stablecoin regime. MAS Notice PSN07 sets requirements for single-currency stablecoin issuers, including reserve backing, redemption rights, and monthly attestations.
- Transitional arrangements. Existing DPT service providers admitted under the transitional exemption must submit licence applications within nine months and comply with safeguarding rules within six months.
Program actions
- Licensing strategy. Confirm licencing categories for custodial, transmission, and brokerage activities and prepare submissions with updated compliance frameworks.
- Custody controls. Implement segregation, trust arrangements, and reconciliation tooling that satisfy MAS asset safeguarding requirements.
- Stablecoin compliance. For single-currency stablecoins, design reserve management, attestation, and redemption processes aligned with Notice PSN07 and accompanying guidelines.
- AML/CFT enhancements. Update transaction monitoring, Travel Rule implementation, and suspicious transaction reporting controls to reflect broadened obligations.
Sources
- MAS — Commencement of Payment Services Act Amendments
- MAS Explainer — Regulations for Digital Payment Token Services
Zeph Tech equips DPT providers and stablecoin issuers in Singapore with safeguarding, licensing, and AML/CFT control programmes aligned to the amended Payment Services Act.