MAS further clarifies on the Payment Services Act and related instruments
On 19 April 2024, the Monetary Authority of Singapore (“MAS”) published its revised frequently asked questions (“FAQs”) on the Payment Services Act (“PS Act”). This follows from the Payment Services (Amendment) Act 2021 that took effect on 4 April 2024, along with the changes to the Payment Services Regulations 2019 (“PSR”) and various related regulatory instruments. Read our client alerts on the Broadening of PS Act and Streamlining Business Conduct for Payments Firms for more.
We set out the key revisions to the FAQs below:
Scope of cross-border money transfer service
- MAS clarified that the scope of cross-border money transfer service covers any (1) transfer of money between Singapore and another country, or (2) any arrangement for the transmission of money between two countries, regardless of whether the sender and the recipient are the same person.
- In respect of (2) above, MAS also clarified that where a person in Singapore carries on a business of arranging for the transmission of money between two countries, this would also constitute a cross-border money transfer service, regardless of whether the person accepts or receives moneys in Singapore.
Treatment of Single-Currency Stablecoins (SCS)
- MAS clarified that it has finalised the framework for MAS-regulated stablecoins, which will apply to SCS that are pegged to the Singapore Dollar or any G10 currency, and which are issued in Singapore. Stablecoin issuers regulated under the framework will be subject to additional regulatory requirements, and may apply to MAS for their stablecoins to be recognised and labelled as “MAS-regulated stablecoins”. Read our client alert for more.
- MAS also updated that it is working on the necessary legislative amendments to implement the stablecoin framework, and will consult on those amendments in due course.
Licensing requirements in respect of additional DPT services
- Service of accepting digital payment tokens ("DPTs”) from one DPT account for the purposes of transmitting / arranging for the transmission of DPTs to another DPT account: MAS clarified that this service involves coming into possession of the DPTs, with a clear intention of transmitting or arranging for the transmission of the accepted DPTs to a third party, as a service. It is not meant to capture the mere acceptance of DPTs from customers, without the intention above.
- Service of arranging for the transmission of DPTs from one DPT account to another DPT account: MAS clarified that this service includes arranging for transfers of DPTs from one account to another account as a service, even if the service provider does not come into possession of the DPTs.
- Service of inducing or attempting to induce any person to enter into or to offer to enter into any agreement for or with a view to buying or selling any DPT in exchange for money or any other DPT: MAS clarified that an entity that does not have possession of the moneys or DPTs may fall within the scope of this service as well, and the scope is not limited to trade matching or order routing services. In this regard, an entity that provides a conduit through which a customer may enter into an agreement to buy or sell DPTs in exchange for money or any other DPTs, will be deemed to be carrying out this service.
- Service of safeguarding or carrying out for a customer an instruction relating to a DPT or DPT instrument: MAS clarified that entities without absolute or exclusive control of the DPT or DPT instrument may similarly fall within the scope of regulation. In clarifying the scope of this new service, MAS also highlighted that technical service providers that support the provision of any payment service but do not enter into possession of money under that payment service, are excluded from regulation under the PS Act.
- MAS has provided case studies in the FAQs, as examples of business models that involve the DPT services described above.
