Payment Services Act Crypto Rules: Key Requirements for 2025

• By JayKay Sun
• 21 Nov, 2024
• 22 Comments

If you run a crypto exchange, wallet service, or any digital‑asset platform, you’ve probably felt the pressure of juggling different sets of rules around the world. The Payment Services Act umbrella now covers everything from Singapore’s tight licensing regime to the United States’ new CLARITY Act, Europe’s PSD2‑MiCA blend, and Japan’s evolving PSA amendments. This guide pulls those pieces together, explains what you need to do before the next deadline, and shows how to keep compliance from turning into a nightmare.

Quick Takeaways

• Singapore’s FSMA deadline is June302025 - no extensions.
• The U.S. CLARITY Act splits crypto into three categories, assigning oversight to the SEC or CFTC.
• Europe requires PSD2 authorization for crypto‑payment services by March22026, with strong customer authentication.
• Japan’s PSA amendment (2025) tightens cold‑wallet storage and introduces a three‑tier licensing model.
• Cross‑border providers must run separate compliance programs for each jurisdiction while maintaining a unified operational backbone.

Singapore: FSMA Crypto Requirements

Financial Services and Markets Act is Singapore’s legal backbone for digital‑asset providers. The Monetary Authority of Singapore (MAS) treats crypto platforms like banks: they must obtain a licence, conduct rigorous customer suitability checks, and publish clear risk disclosures. Key points:

• Consumer‑protection rules (updated Sep2024) forbid misleading marketing and require detailed risk statements.
• Credit‑card purchases of crypto are outright banned.
• The Travel Rule applies to any transfer above the MAS‑defined threshold - both the sending and receiving platform must exchange sender/receiver details.
• June302025 is the absolute cut‑off. Any unlicensed service must shut down on that date.

Failure to comply triggers immediate enforcement, hefty fines, and possible imprisonment for senior executives.

United States: The CLARITY Act Framework

Clarifying Law Around Intent of Congress To Regulate Your (CLARITY) Act re‑writes the crypto‑regulation puzzle in the U.S. It classifies digital assets into three buckets:

1. Digital commodities (regulated by the CFTC).
2. Investment‑contract assets (SEC jurisdiction).
3. Permitted payment stablecoins (treated like money‑market instruments).

Implications for service providers:

• Broker‑dealers can now handle digital commodities and stablecoins without separate CFTC registration, provided they are SEC‑registered.
• Exchanges must adopt hybrid record‑keeping capable of tracking blockchain transactions alongside traditional trade books.
• DeFi platforms may qualify for limited exemptions, but they still need to file detailed reports on token classifications.

European Union: PSD2 Meets MiCA

European Banking Authority issued guidance that aligns the Payment Services Directive2 (PSD2) with the Markets in Crypto‑Assets (MiCA) regulation. The key outcome: crypto‑asset transfers count as payment services, triggering PSD2 licensing.

• Authorization deadline: March22026.
• Strong Customer Authentication (SCA) is mandatory for custodial wallets that qualify as payment accounts.
• Payment‑fraud reporting and capital‑adequacy calculations apply equally to electronic‑money tokens (EMTs) and fiat.
• Exchanges of crypto‑for‑crypto or crypto‑for‑funds are excluded from PSD2, staying under MiCA alone.

National Competent Authorities (NCAs) can use the information submitted for a Crypto‑Asset Service Provider (CASP) licence to fast‑track the PSD2 authorisation.

Japan: 2025 PSA Amendments

Japan's Payment Services Act has been updated several times, most recently in March2025. The amendments build on the 2019 overhaul that renamed “virtual currency” to “crypto assets.” Main changes:

• Cold‑wallet storage is mandatory for all user assets - exchanges must keep the majority of holdings offline.
• A three‑tier licensing system (Type1,2,3) matches the scale of services, from simple remittance to full‑blown exchange operations.
• Advance reporting of changes to handled crypto assets is required, cutting the lag between market moves and regulator awareness.
• Advertising rules now forbid any “guaranteed return” language and demand clear disclosure of fees and risks.

Implementation guidelines are expected later in 2025, but providers should start redesigning custody architecture now.

Cross‑Jurisdictional Compliance Challenges

Running a global crypto business feels like playing chess on several boards at once. The biggest pain points are:

1. Timeline fragmentation: Singapore’s hard June2025 deadline versus Europe’s March2026 window can force staggered releases.
2. Technical variance: Travel Rule data formats differ from Europe’s SCA APIs, while Japan demands offline cold‑wallet segregation.
3. Consumer‑protection divergence: Singapore bans credit‑card purchases, Europe focuses on SCA, and the U.S. emphasises investor‑category disclosures.
4. Enforcement posture: MAS is zero‑tolerance, EU authorities provide transition no‑action periods, and the SEC/CFTC coordinate but can still issue overlapping orders.

To survive, firms need a modular compliance engine that can toggle rules per jurisdiction while sharing a common data‑layer.

Practical Compliance Checklist

• Identify the jurisdictions you operate in and map each to the relevant PSA provision.
• Secure licences before the earliest deadline (e.g., Singapore’s June302025).
• Implement Travel Rule data exchange (JSON‑V2 format) for all outbound transfers above the threshold.
• Deploy strong customer authentication for custodial wallets in the EU and any SCA‑required flows in Japan.
• Adopt a cold‑wallet strategy that meets Japan’s mandatory offline storage while satisfying MAS and EBA safeguarding standards.
• Classify each token under the U.S. CLARITY Act to know whether the SEC or CFTC is the lead regulator.
• Prepare consumer‑disclosure documents that cover risk warnings, fee structures, and prohibited marketing language for all regions.
• Set up automated reporting pipelines for advance change notifications (Japan) and periodic capital‑adequacy calculations (EU).

Comparison of Key Requirements by Jurisdiction

Next Steps & Troubleshooting

When you hit a roadblock, ask yourself:

1. Is the issue regulatory (licence, deadline) or technical (API, data format)?
2. Can I isolate the problem to a single jurisdiction’s rule‑set?
3. Do I have a local legal counsel or compliance partner who understands the nuance?
4. Is there a sandbox or regulatory‑test environment (e.g., MAS sandbox) I can use to validate before full rollout?

Typical fixes include:

• Switching from a generic JSON payload to the MAS‑approved Travel Rule schema.
• Adding an SCA module that supports both Open Banking (EU) and local 2FA (Japan).
• Re‑classifying a token from “digital commodity” to “investment contract” to align with SEC guidance, which may change reporting frequencies.

Keep a version‑controlled compliance repository so you can roll back changes quickly if a regulator raises a concern.

Frequently Asked Questions

Do I need a separate licence for each country?

Generally, yes. Singapore, the EU, Japan, and the U.S. each require their own authorisation or registration. Some jurisdictions allow reciprocal recognition, but you must still meet local technical rules like the Travel Rule or SCA.

What happens if I miss the Singapore deadline?

MAS will issue an immediate cease‑and‑desist, levy fines up to 10% of annual turnover, and may pursue criminal charges against senior officers. No grace period is provided.

How does the CLARITY Act affect DeFi platforms?

DeFi projects can apply for limited exemptions, but they must still submit token classification reports and maintain audit‑ready records. Failure to do so may trigger SEC enforcement for securities‑like tokens.

Is Strong Customer Authentication required for all crypto wallets in Europe?

Only custodial wallets that are considered payment accounts need SCA under PSD2. Non‑custodial or self‑hosted wallets fall outside PSD2 and are governed solely by MiCA.

What technical standards does the Travel Rule use in Singapore?

MAS adopts the FATF‑recommended JSON‑V2 schema, which includes sender/receiver names, addresses, dates of birth, and transaction identifiers. Platforms must exchange this data for every transfer above the set SAR (usually S$1,500).