Monetary Authority of Singapore Encouraging Crypto Firms To Operate In The Country

The Central Bank of Singapore, the Monetary Authority of Singapore is in process of setting regulations in place encouraging cryptocurrency firms to operate in the island state. The move is to avoid “Singapore being left behind.”

The Central Bank of Singapore, the Monetary Authority of Singapore is in process of setting regulations in place encouraging cryptocurrency firms to operate in the island state. The move is to avoid “Singapore being left behind.”

Singapore MAS

 

The head of the Monetary Authority of Singapore managing director Ravi Menon spoke in an interview with Bloomberg.

Highlights

“We think the best approach is not to clamp down or ban these things”

“With crypto-based activities, it is basically an investment in a prospective future, the shape of which is not clear at this point”

“But not to get into this game, I think risks Singapore being left behind. Getting early into that game means we can have a head start, and better understand its potential benefits as well as its risks.”

Background of the thought process can be traced back to a Reply to Parliamentary Question on Crypto Asset Market before the Singapore Parliment in April 2021

Reply to Parliamentary Question on Crypto Asset Market

QUESTION NO 869 NOTICE PAPER 348 OF 2021 FOR WRITTEN ANSWER Date: For Parliament Sitting on 5 April 2021 Name and Constituency of Member of Parliament Mr Desmond Choo, MP, Tampines GRC Question:

To ask the Prime Minister

  • (a) how large is the crypto asset market in Singapore;
  • (b) how does MAS view the trend of greater transactions of such assets amongst companies and retail investors; and
  • (c) how are crypto asset exchanges regulated to provide a stable and benign trading environment in Singapore.

 Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:

5. Exchanges offering the trading of cryptocurrencies are regulated as digital payment token service providers under the Payment Services Act. Given their limited scale, these entities are regulated primarily for money laundering and terrorism financing risks. However, the Act provides MAS the powers to to impose additional measures on digital payment token service providers as needed.

6. As for securities tokens, they are subject to the same securities laws as traditional securities. Hence, an exchange that enables trading in securities tokens is regulated under the Securities and Futures Act and subject to the same rules, especially on fair, orderly and transparent trading, as any securities exchange. The size of the securities tokens market today is also small. Of more than 60 Recognised Market Operators currently regulated by MAS under the SFA, only three offer the trading of securities tokens, and with very small trading volumes. Recognised Market Operators are also not allowed to offer their products to retail investors.

7. To address the money laundering and terrorism financing (“ML/TF”) risks associated with cryptocurrencies, MAS has taken steps on three fronts.

8. First, digital payment token service providers, which are entities involved in providing cryptocurrency-related services, need to be licensed by MAS. They must comply with AML/CFT requirements, such as obligations to perform customer due diligence and transaction monitoring. They are also required to file suspicious transactions reports with the Commercial Affairs Department (CAD).

9. Second, MAS has stepped up surveillance of the cryptocurrency sector, to identify suspicious networks and higher risk activities for further supervisory scrutiny.

10. Third, MAS and the CAD will continue to raise public awareness on the risks of investing in digital payment tokens, through our advisories and public education efforts. These advisories provide consumers with information on how to avoid being cheated or inadvertently used as mules to carry out money laundering activities.

11. The crypto assets space is constantly evolving. MAS has been closely monitoring developments and will continue to adapt its rules as needed to ensure that regulation remains effective and commensurate with the risks posed. Investors, on their part, should exercise extreme caution when trading cryptocurrencies.

Source: Bloomberg MAS

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