Regulations for fiat on/off-ramps
Do fiat on/off ramps fall under the scope of the PS Act?
Fiat on/off ramps will be regulated under the PS Amendment Act.
"Currently, MAS regulates service providers dealing in DPTs and facilitating the exchange of DPTs where the service provider comes into possession of moneys or DPTs under the PS Act. These are common business models of DPT service providers that operate in Singapore."
"The Bill will expand the scope of the PS Act to empower MAS to regulate service providers of DPTs that facilitate the use of DPTs for payments, and may not possess the moneys or DPTs involved. The Financial Action Task Force standards term these service providers as Virtual Assets Service Providers ("VASPs")."
Source: Allen & Gledhill, last revised on 15 January 2021
"Fiat on/off ramps (ie, businesses facilitating fiat-to-crypto exchanges (or vice-versa)) will be subject to regulation under the SFA and/or the PS Act [...]. They will also be subject to enhanced KYC/AML requirements, as they are considered by the MAS to carry higher money laundering and terrorism financing risks due to the anonymity, speed and cross-border nature of their transactions [...].
Under the amendments, the scope of regulated digital payment token services will be expanded to include:
• facilitating the transmission of digital payment tokens from one account to another;
• custodial services for digital payment tokens; and
• facilitating the exchanges of digital payment tokens where the service provider does not come into possession of the moneys or digital payment tokens involved.
Subsequently, these changes will regulate blockchain-related businesses that already offer such services in the market, but are not subject to existing laws under the SFA or the PS Act."
Source: Chambers and Partners, last revised on 8 May 2022
MAS will also be empowered to impose further measures, including "user protection measures on certain DPT service providers to ensure the safekeeping of customer assets held by the DPT service provider".
Source: Baker McKenzie Wong & Leow, last revised on November 2020