The Central Bank of Singapore has completed the creation of a new regulatory framework for payment services that work with fiat and cryptocurrencies. Service providers operating in the bypass of the regulatory framework, from now on, will have to obtain a license.
Monetary Authority of Singapore (MAS), the Central Bank of the country, has announced the readiness of the new regulatory framework for payment services. Ong Ye Kung, MAS board member and the Education Minister, submitted the bill in parliament. According to him, the bill will provide a more favourable environment for innovation in payment services and the absence of risks in all the chain of payments.
The owners of the cryptocurrency payment services that fall outside of the current regulation will be able to obtain licenses for their activities in accordance with the new rules. Experts suggest that the new rules will affect electronic wallets and digital payment tokens, like Bitcoin and Ethereum.
The bill means for the regulation of such activity as opening of accounts and issue electronic money, transactions within Singapore and beyond, concluding contracts with trading platforms, as well as the exchange and distribution of digital payment tokens.
According to the Central Bank, the bill includes two parallel regulatory framework. The first allows a Central Bank to regulate the payment systems for efficiency and financial stability. The second is requires retail payment service providers to obtain a license. MAS argues that one license is needed per service provider at any point in time.
To obtain a license, providers will need to indicate the category to which belongs payment service — money-changer, standard payment institution or a major payment institution. The first two categories will be regulated primarily for money laundering and terrorism financing risks. The last category is waiting for a more comprehensive regulation.
The statement said:
"Payment service providers can apply to be a standard or major payment institution, depending on their transaction volumes. Under the new rules of the Monetary Authority of Singapore, providers of payment services must obtain a license within a year after the bill will come into force. Service providers that issue tokens for digital payments will have to obtain license within 6 months."