Changing to the Payment Services Law is Necessary to the Nation’s Financial Security
Money laundering is a constant battle for most economies. Without regulation, the unsolicited excess money will harm the economic balance than it does good. For the layman, more money may look good, but not necessarily on the national account. No country approves money obtained from criminal sources; thus, money laundering is the cleansing process of those sources. Anti Money Laundering Act around the world serves to eradicate money laundering and terrorist financing. Hence, the proposed changes to payment services law in Singapore is to focus on these matters.
Accountability of Asset Protection
Physical transactions have proven to effectively detect money laundering activities as it requires specific accountability from individuals or companies. But with digital transactions taking over, there have been possibilities of money laundering activities that could go unnoticed. In Singapore, the Parliament is proposing changes to the law that regulates virtual payment service providers. The changes will also likely strengthen relevant laws governing digital payment tokens. This is to ensure companies that issue digital tokens protect the assets of their users. As with digital transactions, lawbreakers can quickly transfer values of assets through digital payment tokens from one person to another. Digital payments are also boundless; hence, any cross-border money transfers may increase money laundering and terrorist financing risks.
Subject to Rules
The current laws regulating these digital payment service segments were thought to be enough to mitigate such activities. But, if such actions can go on without specific rules, there is a high probability for undesirable financing activities to take place. With the suggested amendments, the Money Authority of Singapore (MAS) recommends cross-border money transfer service providers. Such service providers will then be subject to MAS regulations and investigated if suspected of illegal activities. Besides requiring service providers to be licensed, the amendments will also impose user protection measures. The measures will take place onto digital payment token service providers to ensure customers’ assets are safe and sound. The prospective reform will empower the necessary authorities to implement steps in the public’s interest and Singapore’s financial system’s stability.
Cross-border transfers are gaining traction as many more are adopting it in their daily lives. It is through cross-border money transfers that may flag suspicious activities. This may happen because of the anonymity of transfers that occurs between countries as it has now become digital. Nevertheless, in the interest of public safety at large, MAS is already regulating such a digital payment sector concerning terrorist financing or money laundering.
As usual, Singapore is looking forward to nipping unlawful and discreet financial activities before it can take place. Thus, proactive measures proposed in the Parliament is necessary to safeguard the sector. Besides that, essential changes would help develop and evolve new payment tokens, leading to quick user adoption. The Payment Services (Amendment) Bill has yet to be passed but most likely will be granted given its necessity to the financial system, monetary policy, and public safety.