MAS Supports New Code of Practice for Payment Service Providers in Singapore

MAS Supports New Code of Practice for Payment Service Providers in Singapore

The Monetary Authority of Singapore (MAS), the nation’s central bank, has endorsed a new Code of Practice developed by the Association of Cryptocurrency Enterprises and Startups Singapore (ACCESS). The initiative is designed to guide payment service providers in obtaining licenses under Singapore’s Payment Services Act, which came into effect in January 2020.

This collaborative effort aims to strengthen Singapore’s position as a leader in the digital payments ecosystem while ensuring compliance with international standards.

What is the Code of Practice?

The Code of Practice provides practical regulatory guidance tailored to digital payment service providers. It was developed in consultation with key stakeholders, including the Association of Banks in Singapore, and aims to:

1. Standardize Compliance: Address anti-money laundering (AML) and counter-terrorism financing (CFT) measures.
2. Enhance Regulatory Clarity: Provide clear Know-Your-Customer (KYC) guidelines.
3. Support New Payment Activities: Cover innovative services like e-wallets and cryptocurrency exchanges.
4. Facilitate Licensing: Assist global and local providers in obtaining operating licenses under the Payment Services Act.

Why the Code of Practice Matters

Singapore’s Payment Services Act mandates that all providers of specified payment services, including digital payment platforms and cryptocurrency trading companies, must obtain an operating license. The Code of Practice serves as a roadmap for navigating the regulatory framework, ensuring compliance, and fostering confidence in the digital payments landscape.

Key Highlights of the Code

• Focus on AML and CFT: Aligns with the Financial Action Task Force (FATF) Travel Rule to combat money laundering and terrorism financing.
• KYC Best Practices: Establishes clear protocols for verifying customer identities and conducting risk assessments.
• Public Consultation and Industry Input: The Code was shaped by feedback from public consultations and incorporates guidelines from the Payment Services Act.
• Dynamic Framework: Designed to evolve with emerging trends and technologies, ensuring relevance over time.

Support from MAS and ACCESS

MAS has played a pivotal role in facilitating the development of the Code, emphasizing its importance for building a robust digital economy. Anson Zeall, Chairman of ACCESS, highlighted the initiative’s impact:

“The Code of Practice aims to be an industry standard to ensure that crypto-firms have put in place sufficiently robust AML and CFT measures while taking into account their risk assessments. Through this initiative, we hope to point both global and local digital payment service providers in the right direction to successfully obtain their operating licenses and expand their presence in Singapore.”

Driving Confidence in E-Payments

The Code is expected to bolster trust in e-payments by ensuring that service providers adhere to strict regulatory standards. Key benefits include:

• Promoting a Secure Digital Economy: Enhanced compliance measures contribute to a safer ecosystem for users.
• Encouraging Innovation: By clarifying regulatory requirements, the Code allows providers to focus on developing new payment solutions.
• Global Competitiveness: Establishing Singapore as a hub for digital payments and blockchain innovation.

Future Evolution of the Code

The Code of Practice is designed to adapt to changes in the industry, with continuous input from regulators, industry players, and stakeholders. This collaborative approach ensures that the framework remains relevant and effective in addressing emerging challenges.

Conclusion

The new Code of Practice backed by MAS represents a significant step forward in regulating and fostering innovation within Singapore’s digital payments ecosystem. By standardizing compliance and supporting providers under the Payment Services Act, the initiative sets a benchmark for global best practices in the cryptocurrency and digital payments industry.

For businesses operating in or entering the Singapore market, the Code offers invaluable guidance to navigate the regulatory landscape, build trust, and contribute to a thriving digital economy.

To learn more about the innovative startups shaping the future of the crypto industry, explore our article on the latest news, where we delve into the most promising ventures and their potential to disrupt traditional industries.