Officially commenced on 28 January 2020, the Payment Services (PS) Act is a statute enacted by the Parliament of Singapore which aims to provide regulatory frameworks for payment systems and payment service providers in Singapore. The Act was to create regulatory certainty and consumer safeguards, while encouraging innovation and growth of payment services and FinTech, according to the Monetary Authority of Singapore (MAS).
Similar to the European Union’s 5th Anti-Money Laundering Directive (5AMLD), the Payment Services (PS) Act closely follows the guidelines proposed by the Financial Action Task Force (FATF) in an attempt to curb money laundering and terrorism financing through the use of digital payment tokens.
Beyond impacting the growing e-payments industry, the legislation also affects cryptocurrency exchanges based in Singapore, such as BiKi, as they would fall under the category of ‘digital payment token services’ for regulated activities.
With the commencement of the Payment Services (PS) Act, the Money-changing and Remittance Businesses Act and Payment Systems (Oversight) Act will be repealed as the new framework will streamline and merge the various aspects of the two Acts.
Singapore remains one of the few countries that have enacted regulations and frameworks on the cryptocurrency industry, seemingly being open and receptive of the fast-evolving crypto industry. While many are skeptical if the involvement of the Singapore government would be truly beneficial for the growth of the industry, one must take note of the various benefits it entails.
First and foremost, consumers are better protected from scams and frauds which are rampant in the nascent crypto industry. For companies in the industry, including but not limited to centralized exchanges like BiKi Exchange, acquiring the license would not only mean increasing its credibility in the broader finance industry, but also gaining the trust of the consumers of Singapore and around the world.
In light of that, it remains to be seen the impacts of the Payment Services (PS) Act. Given that Singapore is one of the best financial services hubs around the globe, it will likely seek to maintain its competitive advantage. Indeed, the Monetary Authority of Singapore (MAS) is actively holding public consultations to ensure the concerns of the relevant sectors are taken into account, with the ultimate aim of reducing the vulnerability of the sector to financial crimes but not stifling innovation concurrently.
As more blockchain companies apply for the license and the situation continually develops, we can expect the Payment Services (PS) Act to be updated so as to “facilitate growth and innovation while mitigating risk and fostering confidence in our payments landscape.”
Ethan Ng, CEO of BiKi SEA, is positive about the Payment Services (PS) Act. While he anticipates a “period of correction in the Singapore digital tokens market as companies get adjusted to something as new as this”, he posits that “it will also attract more credible blockchain companies to be based and licensed in Singapore. This is a critical move towards a new era for the industry.”
To read more on his thoughts, click here.
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