Comparative Analysis of the Payment Services Act of Japan and Singapore

A comparative legal analysis of the payment services act in the jurisdiction of Japan and Singapore.Finance alone is already a difficult regulatory terrain, and this has become a minefield with Technological inroads. Columbia’s Charles Calomiris has critiqued the erosion of rule of law as regulators grappled with the financial crisis, even as they aspire to a stable financial system with fair, efficient transparent markets that protects investors and consumers. One aspirational standard is that by the International Organization of Securities Commissions.With modern technology, regulators must now add a creative hat and turn entrepreneurial. This paper examines how Payment Services Act(s) (“PSA”) have evolved in response to critical events in the countries of Singapore and Japan and how they have helped foster (or even reintroduce) rule of law into fintech regulation. At the end, suggestions for the Singapore system are recommended drawing from the various successes of Japan.For Singapore, the paper would look at the events leading up to the Initial Coin Offering (“ICO”) craze, the response of which modular sandbox (rule by parts) is an example of regulative entrepreneurship. The regulator seeks out participation through consultation papers, and later re-releases case guidelines as their soft-law. With the powers of delegated discretion, the regulator becomes a creative and entrepreneurial entity. We will also examine B2C2 v Quoine (Japan’s 3 rd Unicorn) and its hypothetical interaction with the Payment Services Act. (an automated trading mistake case) Academics have argued for a different result following latest PSA implementation and revisions.For Japan, the paper will first look at the PSA revisions following the famous case of Mtgox, the world’s most affluent insolvent company in history. The technically bankrupt company is also technically balance sheet solvent to the tune of over a few billion at its high. Following which the developments after Coincheck are also reviewed.It examines how rule of law is periodically patched into the system as regulators catch up with the technology, as well as the latest revisions following the latest rounds of exchange and cryptoasset ups and downs. Finally it highlights room in which Singapore can learn from Japan and take one more look at the ties of Quoine-Liquid in bridging the borders of the two countries