If you issue crypto-currency or electronic money (i.e. money which is stored electronically), or provide services dealing in crypto-currency or electronic money in Singapore, you will now need to apply for a licence from the Monetary Authority of Singapore (MAS).
The Payment Services Act was passed by Parliament on 14 January 2019 and published on 20 February 2019. It will come into operation once the notice has been published in the Government Gazette.
The Act clearly sets out, for the first time ever, the licensing requirements for a variety of payment service providers, including, crucially, those companies which are in the business of issuing crypto-currencies.
Under existing laws, there was a lack of clarity over the regime to which such issuers were subject. In addition, it has not always been clear whether issuers of crypto-currencies required a licence or not.
Under the Act, a payment services provider will now need to apply for one of three types of licences (money-changing licence, standard payment institution licence, major payment institution licence). The type of licence to be applied for will vary depending on the business volume of the company and the number of services being offered by the company.
For example, if the company provides only crypto-currency services, it will need to apply for a standard payment institution licence. However, if the company provides crypto-currency services and processes, over a calendar year, on average, more than S$3 million a month in the course of providing crypto-currency services, it will need to apply for a major payment institution licence.
The Act also puts in place reporting obligations. These obligations will vary depending on the type of licence obtained by the payment service provider. In brief, the Act will require a payment service provider:
- to notify MAS of certain matters, including:
- any proceedings which are instituted against the payment service provider, whether in Singapore or elsewhere;
- any events that materially impede or impair the operations of the payment service provider;
- any disciplinary action taken against the payment service provider by any regulatory authority other than MAS, whether in Singapore or elsewhere;
- any significant changes to the regulatory requirements imposed on the payment service provider by any regulatory authority other than MAS, whether in Singapore or elsewhere
- to submit periodic reports or returns relating to the payment service provider's business
- maintain with the Monetary Authority of Singapore security of a prescribed amount for the due performance of its obligations to every payment service user
Dailure to comply with the obligations and requirements of the Act may, depending on the nature of the contravention, result in the revocation of the licence, the imposition of fines and/or imprisonment.