SINGAPORE, Tuesday, April 9, 2024- Singapore’s Monetary Authority of Singapore (MAS), has implemented licensing requirements for companies offering crypto custodial services.1
The regulations, passed by parliament in 2021 but activated on April 4, 2024, aim to bring greater transparency and consumer protection to the burgeoning crypto sector.2
Under the new rules, firms holding clients’ digital assets will need to obtain a license from the MAS. Previously, Singapore’s regulatory framework for cryptocurrencies primarily focused on exchanges.
This expansion brings custodial services, which involve safeguarding users’ crypto holdings, under the MAS’s purview.
The licensing requirements emphasize user protection and financial stability. Custodians will be subject to regulations mandating the segregation of client assets, proper record-keeping, and robust internal controls.
The revisions encompass the “segregation of customers’ assets into a trust account for their benefit, proper maintenance of records, and implementation of effective systems and controls.” These changes will become operative within six months of April 4, 2024.
Entities presently engaged in cryptocurrency-related operations under the Payment Services Act must commence a transition procedure within 30 days and submit a licensing application within six months of April 4, 2024, to sustain activities temporarily until their application undergoes review.
Existing crypto service providers under the Payment Services Act have a six-month grace period to transition and apply for new licenses. They can continue operating temporarily while their applications are reviewed.
This move by Singapore underscores a global trend of increased scrutiny of cryptocurrencies. Regulators worldwide are grappling with the challenges posed by this new asset class, seeking to balance innovation with safeguarding financial systems and consumers.
- finance.yahoo.com: https://finance.yahoo.com/news/singapore-enacts-licencing-requirements-crypto-062520435.html?guccounter=1[↩]
- mas.gov.sg: https://www.mas.gov.sg/news/speeches/2021/payment-services-amendment-bill[↩]
