- Singapore financial watchdog mulling crypto regulations as the bill goes for first reading
- Bill proposes to regulate cryptocurrency exchanges
- MAS has shown a relatively soft approach towards cryptocurrency exchange regulation
The proposed payment services regulation bill in Singapore has been moved to the first reading stage. The bill empowers the Monetary Authority of Singapore (MAS) to regulate different payment services including cryptocurrencies.
Bill to Empower the MAS with Regulatory Control Over Emerging Payment Methods
Singapore’s Minister for Education Ong Ye Kung, according to the Finance Feeds publication, moved the Payment Services Bill for its first reading on Monday, November 19, 2018, on behalf of the Deputy Prime Minister and Minister-in-charge of the Monetary Authority of Singapore (MAS) Mr. Tharman Shanmugaratnam.
The bill, which takes into account the emerging trends in the payment services and the risks associated with them, will empower MAS to have regulatory control of different payment services besides addressing matters to do with money laundering and terrorism funding, loss of customer funds, fragmentation and limitations of interoperability and technology and cyber risks. The bill recognizes cryptocurrencies and defines trade in them as:
“Buying or selling digital payment tokens (commonly known as cryptocurrencies), or providing a platform to allow persons to exchange digital payment tokens in Singapore.”
The proposed bill will regulate cryptocurrency exchanges and will require that they hold a license explaining the type of services they are entitled to offer. The licensing will be activity based and will take a modular approach that will ensure that regulation is measured appropriately in tandem with the risks carried by specific payment service providers.
While cryptocurrency exchanges have been allowed to conduct their businesses in Singapore without licensing, cryptocurrencies are not legal tender. However, the City-State has assumed a crypto-friendly stance compared to its neighbors. Singapore’s Tax Authority considers Bitcoins and other cryptocurrencies as “goods” and, as a result, applies Goods and Services Tax, which is the country’s equivalent of Value Added Tax (VAT).
Soft Stance Towards Cryptocurrencies
The Monetary Authority of Singapore (MAS) has shown a relatively soft approach towards cryptocurrency exchange regulation and has applied existing legal frameworks where possible. In January 2018, Deputy Prime Minister Tharman Shanmugaratnam stated that digital currencies were subject to the same AML and CFT measures as traditional, fiat currencies.
While responding to a parliamentary question in October about MAS’s regulatory conclusions and assessments of cryptocurrencies, the Deputy Prime Minister said cryptocurrency and ICOs fell outside of its current financial legislation. However, when asked whether the Government was keeping track crypto investment in Singapore and the possibilities of regulatory frameworks in the future, he said the authority was working towards a robust cryptocurrency regulation regime to protect investors and stated:
“MAS has been monitoring the use of… virtual currencies.”