Regulations have been a major obstacle in the cryptocurrency field for a long time and regulatory authorities are mostly perceived as villains. In a bid to change this notion, the government of Singapore launched the new Payment Services Act.
Under the Payment Services Act [PSA], organizations dealing with cryptocurrency and blockchain technology will be subject to scrutiny so that transactions are safeguarded.
South Asian countries have taken a keen interest in the cryptocurrency world and that is why 20 of the world’s top 50 crypto exchanges are from there. The government decided to take such a step because of intermittent money laundering and other issues related to the market. These are the exact problems that the Payment Services Act wants to tackle, a roster that also includes terrorism financing and cyber risks.
The PSA streamlines the regulation of payment services in single activity-based legislation. The implementation of the latest rule on January 28 means that earlier regulations such as the PS[O]A and MCRBA are repealed. The Act becomes one of the first pieces of government regulations tailored for cryptocurrencies such as Bitcoin and Ethereum.
The authorities in Singapore have confirmed that the country wants to instill confidence in users who are involved in crypto. Apart from this, the latest act also brings cryptocurrency exchanges under the ambit of the Monetary Authority of Singapore. Simultaneously, all cryptocurrency businesses will now be subject to Singapore’s anti-money laundering and counter-terrorist financing rules.
A majority of the cryptocurrency organizations need to adhere to the rules set by the FATF, updates in June 2019. Malcolm Wright, the head of the AML Working Group at Global Digital Finance stated:
“The interesting thing about the Monetary Authority of Singapore is that, in a sense, it’s FATF-ready. They were first out the door with a consultation back in July saying this is what we are proposing in terms of the implementation of the PSA, as it relates to sending origination and beneficiary information.“
When the bill was first ratified, it was decided that mobile wallets such as GrabPay and Singtel Dash could not individually hold more than $5000. This was decided to ensure there were no superfluous transactions it the Singapore cryptocurrency space. The bill was passed after extensive debates between MPs, Non-Constituency MP and four nominated MPs.
The Act has been welcomed with open arms in Singapore, with many cryptocurrency honchos praising its merits. Many claimed that the act would bring in more customers into the industry because of a renewed sense of trust. The Payment Services Act is also a way for fintech companies to obtain licenses much faster than the current scenario.
Singapore can now act as a beacon for other countries in South Asia, a region that was responsible for 40 percent of all BTC transactions in the first half of 2019. Holders and enthusiasts of digital assets now wait with bated breath to see what other developments will be made a mainstream reality.