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The implementation of Singapore’s Payment Services Act (PS Act) was effectively the starting pistol for cryptocurrency businesses looking to facilitate payments between fiat and traditional cryptocurrencies in Singapore. Unless you were already covered by some limited grandfathering, you would no longer be able to provide such services in Singapore without the licence.
However, to the frustration of many Digital Payment Token (DPT) businesses, recently published statistics from the MAS show that obtaining a DPT licence is not a straightforward process, with about 19% of the applications so far being withdrawn or rejected. The application processing time is also currently much longer than other types of MAS licences, as no DPT licence has been approved since January 2020.
The statistics came to light in response to the Parliamentary question published on 26th July 2021, where the MAS has provided the following statistics in relation to the licence application under the PS Act:
- MAS has received 480 Payment Services licence applications so far. 170 of these are in relation to DPT services
- MAS has not issued any DPT licences yet, however 30 DPT applications have been withdrawn and 2 have been rejected, suggesting they were not up to scratch
- DPT service providers conducting business in Singapore before 28 January 2020 (the commencement date of PS Act) are temporarily exempted from holding the DPT licence until their licence applications are approved/rejected/withdrawn. 90 DPT service providers are currently on the exemption list
When reviewing the DPT licence application, the MAS’ focus is on the applicant’s framework for countering money laundering and financing of terrorism (ML/TF) and mitigating technology risks, both seen as key areas of focus in the sector. Applicants should ensure they meet the relevant MAS requirements, particularly Notice (PSN02) and Guidelines on Prevention of ML/TF for DPT service, Notice (PSN06) on Cyber Hygiene, and the Technology Risk Management Guidelines.
To increase your chances of a successful application, you’ll need a compliance adviser who understands both the MAS requirements and the nature of DPT business to guide you through the application process and help you respond to the MAS’ onerous questions. Bovill has clients in the payment services industry in Singapore and globally, and can assist licence with all PS licence types.
How Bovill can help
Our specialist team can help set up your compliance framework, including drafting of compliance policies and procedures which are fit for purpose for a DPT business, and once you obtain your license, provide ongoing compliance support and monitoring.