Singapore boosts crypto consumer protection with new Payment Services Act

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Singapore is forcing the country’s cryptocurrency ecosystem to mature. It has already introduced measures that offer a more crypto-friendly position for the space, and set about to revamp its payments services oversight in 2019 with changes to the Payment Services Act (PSA). As of Tuesday, according to an announcement by the Monetary Authority of Singapore (MAS), those changes are now active and will serve to increase consumer protection in the digital currency realm.

The MAS states in its announcement, “The [PSA] adopts an activity-based licensing framework in recognition of the different kinds of activities and new developments in payment services. It also expands MAS’ regulatory ambit to include new types of payment services, such as digital payment token services.” It further explains, “MAS closely engaged the industry through dialogues and public consultations in designing the PS Act. To support the transition of payment services firms to the new PS Act, MAS has initiated a payments regulatory evaluation programme to help them connect with providers of legal services.”

With the implementation of the updated PSA, the previous Money-changing and Remittance Businesses Act and the Payments Systems (Oversight) Act, which governed online money transactions, are now no longer being used. All of the changes introduced have come about with the input of the public, which helped shape the framework that will serve for crypto payment growth in the future. This is going to enable Singapore to become a world leader in digital currency adoption going forward.

The assistant managing director for policy, payments and financial crime for the MAS, Loo Siew Yee, adds in the press release, “The [PSA] 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 [PSA] will facilitate growth and innovation while mitigating risk and fostering confidence in our payments landscape.”

To help entities in the crypto space understand the changes brought about with the implementation of the PSA, several entities are going to lead an education program that will be available to the public. Among those that will be developing workshops for the program are the Association of Cryptocurrency Enterprises and Start-ups, Singapore (ACCESS), the Singapore Blockchain Association (SBA) and the Singapore FinTech Association (SFA).

In addition, any entity in the payments industry that needs legal support will be able to take advantage of the new Payments Regulatory Evaluation Programme (PREP), which is being put together by MAS and the Singapore Academy of Law. The program gives payment firms access to lawyers who specialize in payment service regulations.