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Value Transfer Originator: What You Need to Know

In a recent development, the Monetary Authority of Singapore (MAS) has emphasized the importance of complying with the Travel Rule, which requires value transfer originators to disclose specific information about themselves and their transactions.

Value Transfer Information

  • The value transfer originator’s account number or unique transaction reference number where no account number exists must be disclosed.
  • This information is crucial in ensuring transparency and security in cryptocurrency transactions.

Beneficiary Information

  • The name of the value transfer beneficiary must also be disclosed, along with their account number or unique transaction reference number where no account number exists.

Additional Information Required

  • In addition to the above, the value transfer originator’s residential address, registered or business address, and principal place of business (if different) may be required.
  • The originator’s unique identification number, date and place of birth, incorporation or registration (as applicable) must also be disclosed.

Non-Hosted Wallets and Incomplete Information

  • For non-hosted wallets, incomplete or missing information, the MAS has outlined specific requirements in our Help Center.

Exemption Period

  • The MAS did not grant a grace period for compliance with the Travel Rule.
  • However, under the Payment Services (Exemption for Specified Period) Regulations 2019, digital payment token service providers can operate in Singapore without a license throughout a specific exemption period. This applies only to entities that were already providing digital payment token services before January 28, 2020.

Licensing Requirements

There are three types of licenses available:

  • Money-Changing License: Suitable for businesses that only provide money-changing services.
  • Standard Payment Institution (SPI) License: Allows holders to provide any kind of payment services, including operations with cryptocurrency. This license can be applied if services meet specific thresholds.
  • Major Payment Institution (MPI) License: Offers the same opportunities as the SPI license but is meant for larger companies that go beyond the aforementioned thresholds.

Obtaining a License

To obtain an SPI or MPI license, applicants must meet the following criteria:

  • Be a Singapore-incorporated company or a Singapore branch of a foreign corporation.
  • Have a permanent place of business or registered office where books and records can be securely held.
  • At least one person must be appointed to address any queries or complaints from consumers.
  • Have a minimum base capital of S$100,000 (approximately $73,740) for SPIs and S$250,000 (approximately $184,300) for MPIs.

Additional Requirements

MPI licensees are also required to maintain a security deposit as a small buffer for the protection of customer money.

Assessment Criteria

When evaluating an application for licenses, the MAS considers assessment criteria such as:

  • Fitness and propriety
  • Competency of key individuals
  • Security
  • Compliance arrangements
  • Technology risk management
  • Audit arrangements
  • Annual audit requirements
  • Letter of responsibility
  • Letter of undertaking

Exemption from Holding a License

DPT service providers can be granted an exemption from holding a license under the Payment Services Act for a specified period. This exemption will cease after a specified period or upon approval or rejection by MAS.

Frequently Asked Questions

  • Are cryptocurrencies regulated in Singapore? Yes, provision of DPT services are regulated by the Monetary Authority of Singapore.
  • What is the MAS? The Monetary Authority of Singapore is Singapore’s central bank and integrated financial regulator.
  • Do you need a license to trade cryptocurrency in Singapore? A platform that facilitates trading may require a license depending on its functionality.
  • What are the new crypto laws in Singapore? There have been no recent laws introduced, but the MAS is carrying out consultations regarding amendments to the PSA.

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