Payment Services Act: What It Means for Crypto Traders and Exchanges

When navigating the world of digital assets, Payment Services Act, Singapore’s regulatory framework that governs payment services, including crypto‑related activities, also known as PSA, sets the rules for who can offer token‑swap services, run exchanges, or provide wallet solutions. The law is overseen by Monetary Authority of Singapore (MAS), the country’s central bank and financial regulator, which mandates anti‑money‑laundering (AML) and know‑your‑customer (KYC), the compliance procedures required for any licensed entity. Under the PSA, a crypto exchange licence, a specific approval that lets platforms match buyers and sellers of digital tokens becomes mandatory, and providers of digital token services must register as Digital Token Service Providers (DTSPs), entities authorised to issue, store, or transfer crypto assets. In short, the PSA requires proper licensing, enforces AML/KYC, and gives MAS the power to supervise each participant.

Key Requirements Under the Payment Services Act

The PSA breaks compliance into three core pillars. First, any platform that facilitates the buying, selling, or exchange of crypto tokens must obtain a crypto exchange licence from MAS. This licence demands a minimum paid‑up capital, robust risk‑management policies, and a clear organisational structure. Second, AML/KYC obligations apply to every licence holder: providers must verify user identities, monitor transactions for suspicious patterns, and report any red flags through MAS’s Suspicious Transaction Reporting system. Third, the act defines a new class of regulated entities—Digital Token Service Providers—that includes custodians, wallet operators, and token issuers. DTSPs must file a separate registration, maintain segregation of client assets, and undergo regular audits. Failure to meet any of these conditions triggers enforcement actions ranging from fines to revocation of the licence, illustrating how the PSA directly links regulatory compliance to operational continuity.

For traders, investors, and developers, the PSA reshapes how you approach the Singapore market. If you’re planning to launch an exchange, start by preparing a detailed business plan that addresses capital adequacy, AML/KYC workflows, and custodial safeguards—these are the metrics MAS reviews during licensing. Existing platforms should conduct a compliance gap analysis to ensure all AML procedures align with the latest PSA amendments, especially the expanded definition of “high‑risk” transactions. By treating the PSA as a roadmap rather than a barrier, participants can tap into Singapore’s reputation as a crypto‑friendly hub while staying on the right side of the law. Below you’ll find a curated set of articles that dive deeper into MAS’s oversight, real‑world exchange reviews, and practical guides for staying compliant under the Payment Services Act.