Singapore’s new payment law came into effect in January 2020, making it mandatory for all crypto businesses to get registered and obtain a license. Today, the Monetary Authority of Singapore (MAS), the country’s de facto central bank, granted its first “in-principle approval” to a digital currency exchange under the new licensing protocol. The MAS has been working dutifully with law enforcement and the financial industry towards developing the new payment law.

The Monetary Authority of Singapore gave the go-ahead for the Australian digital currency exchange Independent Reserve to operate in Singapore, providing digital asset exchange and OTC trading services to individuals and institutions. The approval letter is for a Major Payment Institution License in Singapore under the Payment Service Act (PSA), as a regulated provider for DPT or Digital Payment Token Services. Along with the approval comes a set of obligations, including installation of fair consumer protection measures, compliance with appropriate anti-money laundering regulations and the FATF’s travel rule.

In line with the Payment Service Act, crypto firms can acquire three classifications of licenses as per the type of business they carry out. These three classes of licensing include a standard payment institution, a money-changing license and a major payment institution. Each company has to acquire any one of these three licenses to operate in Singapore.

According to the Independent Reserve’s CEO, Adrian Przelozny, the local regulatory structure developed by the MAS has paved the way for both the company and its clients to enter the market with higher assurance. With the first approval in Singapore, it is anticipated that other companies will eventually join Independent Reserve in gaining the support of the regulator. This licensing regime will also help Singapore to become the regional center for the emerging digital currency sector.