Singapore has announced plans to regulate all cryptocurrency activity from here on out.
Singapore to Oversee All Crypto Businesses
The Monetary Authority of Singapore (MAS) has issued new guidance on crypto usage and states that all companies that engage in crypto transactions or offer crypto trading and custody services will have to garner a license through the Payment Services Act. This new rule was passed in early January of this year. The idea is to put a halt on all crypto-related financial crime including money laundering.
Minister for Transport Ong Ye Kung explained during a reading of the act’s bill to Parliament:
This will help minimize the risk of DPT service providers being exploited by criminals to launder illicit proceeds or hide illicit assets.
He further stated concerns about the use of crypto in cross-border payments, saying that this enhances the risk of terrorism funding and other wrongful payment protocols.
As it stands, the MAS is typically only tasked with overseeing cryptocurrency transactions. However, the new bill will alter the organization’s powers to become much longer, giving them the power to monitor all crypto activity within the region and implement their laws upon all companies and firms that have a hand in digital currencies.
In most cases, this will even include businesses that do not even have cryptocurrencies in their possession. However, if these companies offer crypto-based services, they will be subject to the rules and regulations of the MAS.
Ong Ye Kung further stated:
The bill will broaden the definition of cross-border money transfer service to include facilitating transfers of money between persons in different jurisdictions, where money is not accepted or received by the service provider in Singapore. That way, such service providers will come under the regulatory ambit of MAS even if the moneys do not flow through Singapore.
In addition, crypto companies will now be required to implement new measures to ensure customers’ identities and funds are protected. This will include know your customer (KYC) protocols and potentially insurance for digital exchanges and firms offering related services.
More Attention for an Expanding Arena
However, Ong mentioned that he is not terribly worried about the dangers or risks associated with the crypto space given that activity is relatively limited when compared with that of standard financial markets in Singapore, though he acknowledges that the space is growing and thus requires further attention and consideration. He comments:
We have seen the recent development of new forms of DPTs whose values are pegged to stable assets to gain users’ confidence. It is therefore important for MAS to be able to respond to market developments and address new risks in a timely manner… This could include, for example, requiring a DPT service provider to segregate customer assets from its own assets.