Crypto continues to grow into the mainstream financial world, with many countries now recognizing digital assets legally. Singapore has now joined the party as the Monetary Authority of Singapore’s (MAS) Payment Services Act went into effect on January 28. That development set up a framework for the regulation of payment-related activities in the country.

Since this bill stipulates that all crypto firms in Singapore should be registered and licensed, it appears like the perfect time to review the country’s regulatory model. Analysts confirm that it partially resembles the nature of 5AMDL measures recently enacted in Europe.

“Electronic Payments Society” – The Conception

Since 2016, MAS has planned to change the regulations, and since August of that year, it published a paper proposing to modernize the regulatory framework. This framework would become flexible enough to cater to disruptive technologies that keep emerging in the payments and remittance fields.

This move followed an announcement of the agency’s plans to champion “an Electronic Payments Society.” In November 2017, MAS published another paper about the proposed Payment Services Act. In that paper, the regulator confirmed that it was aiming to regulate e-money issuance, cross-border money transfers, and digital currency services.

The agency insisted that it wanted to enhance user and merchant protection while simultaneously creating space for the fintech-friendly ecosystem growth. It also strives to boost cybersecurity. According to the document written by MAS, digital currency intermediaries increase money laundering and terrorist financing risks. That gave a preview of what the crypto regulation in the upcoming bill might entail.

Later on, in November 2018, MAS published the finalized edition of the Payments Services Act (PSA). It was submitted before parliament a few weeks after one policymaker said that he intends to ‘bring together’ crypto businesses and banks. That document was signed in January 2019. Singapore joined Malta, Japan, and Switzerland among a few other countries that had enacted practical regulations on cryptocurrencies.

PSA Operation

PSA lets Singapore’s central bank control all the payments that it considers “crucial to financial stability.” It also creates a compulsory licensing regime for payment service providers. All operators within the country must apply for at least one of the three available licenses subject to the nature and scope of their operation.

The first license is for “money-changers,” and it designed to regulate the service providers primarily against money laundering and all other terror financing risks. Most importantly, the act provides solid regulations for the crypto industry. Those entities that transact more than $3 million per month apply for a comprehensive “standard payment institution license.”

On the other hand, the most strictly regulated tier of licensing is known as “major payment institution,” and it is perfect for the larger service providers. Hence, the PSA offers stable regulations for the cryptocurrency industry. The head of community for London-based blockchain analysis provider Elliptic, David Carlisle, said:

“The PSA makes several changes to Singapore’s regulation of payment services beyond crypto, but bringing crypto services providers within the scope of AML regulation is a key aim of the act.”

The document explains that MAS will regulate the “digital payment tokens” with cryptos like Bitcoin and Ether falling into the category. MAS’s definition of digital tokens does not include payment tokens, security tokens, or utility tokens used by financial regulators in the US. Hence, companies behind cryptos will have minimal opportunities to dodge various regulatory requirements.


Singapore-based digital payment technology businesses will have a month to register with MAS starting January 28. After that, they will have six months to apply for a payment institution license through an extensive online form that enlists brokers, exchanges, and custody. It is still unclear how hard it will prove for businesses to apply for this MAS license:

“Hopefully, MAS will make the process one that doesn’t place an unnecessary additional burden on smaller businesses that can demonstrate compliance. Singapore has always expressed a desire to be a home for new financial innovations, so if it’s carried out in the right way, the licensing process should work to keep non-compliant actors out without hindering the ability of new products and services to come to market.”

In the long term, the act may strengthen local crypto firms and eventually make them more legitimate in the mainstream world. Some challenges may arise with some analysts stating that these MAS regulations will favour the more established operators with more resources than their still-growing competition.

It will take time and drawbacks may come up during the regulatory transition period. Some users may react positively towards regulated exchanges leading to lower liquidity in the unregulated platforms. The unregulated entities may eventually close down or seek regulatory licensing in a different jurisdiction

A period of correction is expected in the Singapore digital tokens market as firms adjust to the new regulatory landscape. Nonetheless, many are generally positive about the PSA, believing that the benefits outweigh the drawbacks. It will stimulate the local ecosystem, in turn, attracting more credible blockchain companies to be licensed and operate in Singapore. Thus, these regulations present a critical move towards a new era for the cryptocurrency industry.

About the author

Wanguba Muriuki is an Editor at Large for E-Crypto News and author of the book- "The Exploitative Intrigues of Cryptocurrency Scams Explained." He is also a passionate creator who sees every aspect of life from a written perspective. He loves Blockchain, Cryptocurrency, Technology, and Traveling. He is a widely experienced creative and technical writer. Everything and everyone is describable. The best description is written.

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CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin19,761 0.51 % 1.33 % 1.52 %
Ethereum1,355.9 0.85 % 1.13 % 1.89 %
Tether1.002 0.16 % 0.12 % 0.15 %
USD Coin1.000 0.44 % 0.25 % 0.18 %
BNB283.64 0.09 % 0.32 % 2.79 %
XRP0.4781 0.47 % 9.21 % 1.84 %
Binance USD1.000 0.15 % 0.14 % 0.18 %
Cardano0.4362 0.24 % 0.04 % 5.23 %
Solana42.12 0.56 % 2.22 % 3.81 %
Dogecoin0.06085 0.22 % 0.82 % 1.76 %

Bitcoin (BTC) $ 19,709.98
Ethereum (ETH) $ 1,351.17
Tether (USDT) $ 0.998559
USD Coin (USDC) $ 0.99625
BNB (BNB) $ 287.18
XRP (XRP) $ 0.475505
Binance USD (BUSD) $ 1.00
Cardano (ADA) $ 0.433786
Solana (SOL) $ 34.65
Dogecoin (DOGE) $ 0.060534