Digital Payment Token (DPT) Updated to Singapore’s Regulatory Framework
Singapore passed the Payment Services Act 2019 (PSA) in January 2019, and an announcement on January 28th revealed an update to the Acts. This update is called the Digital Payment Token (DPT) and includes services that cover cryptocurrency and exchange based in Singapore.
This update is under the already implemented anti-money laundering (AML) and the counter-terrorist financing (CTF) rules. In this case, crypto-related businesses have to register first and then apply for a license to operate.
The Fifth European Anti-Money Laundering Directive (AMLD5) became effective on the 10th of January. On the 28th of January 2019, companies will have thirty days to register with the MAs to declare that they operate a DPT business and are Singapore-based. After the registration, the companies will get grandfathered for six months, and at the same time, apply for a payment institution license.
The Essence of the Digital Payment Token
Loo Siew, the Assistant Managing Director of MAs, noted that the Payment Services Act provides a flexible regulatory framework for the payment sector. This regulatory structure allows the application of rules in a balanced manner and enhances business models’ positive changes.
Siew also pointed out that the PS Act brings about room for growth and innovation, mitigation of risks, and promotion of confidence in Singapore’s payment domain. Globally, countries are utilizing the Financing Action Task Force (FATF) recommendations. These recommendations dot recommended in October 2018 and got updated in June 2019.
Of Global Digital Finance, Malcolm Wright believes that Singapore’s Monetary Authority is ready for FATF implementation. Wright also pointed out that another consultation launched by MAs a few weeks ago resulted in some amendments to the PSA concerning digital assets. These amendments include the transfer of DPTs, including their exchanges, provision of custodial wallets for or on behalf of customers, and the brokering of DPT transactions.
Some of the Crypto Firms Affected by Anti-Money Laundering Rules
Bottle Pay, a UK-based crypto payments provider, noted it was to dissolve last month because of the imminent EU money-laundering rules; Simplecoin and Chopcoin also shut down for the same reason.
Additionally, Derbit based in the Netherlands, announced its plan to relocate to Panama. Due to the rigidity of the Netherlands ’ version of AMLD5, it is a barrier to many traders, both cost-wise and regulatory.