New regulations impose accountability on DPT providers to combat money laundering and terrorism financing
The Monetary Authority of Singapore (MAS) has introduced new measures to enhance user protection and financial stability within the digital payment token (DPT) services sector. The amendments to the Payment Services Act, which will take effect in stages starting April 4, 2024, will bring more activities under MAS regulation, including custodial services for DPTs and cross-border money transfers involving digital assets.
The new scope of regulations aims to tackle money laundering and terrorism financing more effectively. DPT service providers will be required to meet stringent requirements, such as placing customer assets in trust accounts and maintaining effective security systems. These measures will also mandate entities to submit licensing applications within six months to continue their activities under the new rules.
In addition, the MAS has launched the Cosmic platform to combat illegal financing, marking another step in its ongoing efforts to strengthen the regulatory framework around digital financial services. The new legislation also supports information sharing among financial institutions to enhance the fight against illicit financial activities.
