Compliance with the Singapore Payment Services Act 2019
Our lawyers routinely assist clients in complying with the new Singapore Payment Services Act 2019, working with local counsel where required. The following describes what you need to know if dealing in crypto-currency or e-money pursuant to the PSA 2019.
Service providers who issue crypto-currency or electronic money (i.e. money which is stored electronically), or provide services dealing in crypto-currency or electronic money in Singapore, now need to apply for a licence from the Monetary Authority of Singapore (MAS).
The Payment Services Act was passed by Parliament on 14 January 2019 and published on 20 February 2019. It finally came into operation in early 2020.
The Act clearly sets out certain licensing requirements for different payment service providers, including, crucially, those companies which are in the business of issuing crypto-currencies. The PSA addresses the previous lack of clarity over the regime to which such issuers of digital tokens were subject. In addition, it has not always been clear whether issuers of crypto-currencies required a licence or not. The PSA puts into place a "light touch regime" to regulate the crypto industry, with clarity strengthening Singapore's legal framework and leadership position as the leading global crypto hub.
Under the PSA, a payment services provider needs to apply for one of three types of licences (money-changing licence, standard payment institution licence, major payment institution licence). The type of licence to be applied for will vary depending on the business volume of the company and the number of services being offered by the company.
The PSA may also apply to service providers registered outside Singapore, but targeting customers in Singapore.
For example, if the company provides only crypto-currency services, it will need to apply for a standard payment institution licence. However, if the company provides crypto-currency services and processes, over a calendar year, on average, more than S$3 million a month in the course of providing crypto-currency services, it will need to apply for a major payment institution licence.