Monetary Authority of Singapore to Introduce a Regulatory Framework for Cryptocurrency Exchanges
The Monetary Authority of Singapore (MAS) continues to proactively integrate Distributed Ledger Technology (DLT) with finance. Most recently, they are working on a new bill which would do what only a few regulatory bodies around the world have done: provide a clear regulatory framework for cryptocurrency exchanges.
The Monetary Authority of Singapore’s Push for Cryptocurrency Regulation Explained
MAS is working to draft legislation which would regulate cryptocurrency exchange services.
The new bill— which has yet to see approval— aims to provide a flexible framework for payment systems and payment service providers throughout Singapore.
Besides payment services however, the bill looks to increase MAS’ regulatory scope to encompass digital payment token services.
According to Ong Ye Kung— Minister for Education who spoke on behalf of Deputy Prime Minister and Minister-in-Charge of MAS Tharman Shanmugaratnam— the bill would place Singapore at the forefront of the digital asset space:
“We will be among the first few financial services regulators in the world to introduce a regulatory framework for digital payment token services, or what are commonly understood as cryptocurrency dealing or exchange services.”
Ong Ye Kung went on to add that all providers of such services will be required to satisfy anti-money laundering (AML) and counter financing of terrorism (CFT) criteria. Such a need, he emphasized, is due to the increased risk of money laundering and terrorism financing found in digital payment token services.
Notably, the bill updates MAS’ definition of “e-money” to now include e-wallets. Previously, the term “e-money” was confined to stored value and pre-paid services. Now, “e-money” will require issuers to protect the value stored in major e-wallets for both consumers and merchants.
Singapore’s Push for a FinTech Friendly Landscape
The bill is not the sole aspect of Singapore’s push to bring Distributed Ledger Technology (DLT)-based businesses to its soil.
In late 2018, MAS partnered with the Singapore Exchange (SGX) to develop blockchain agnostic prototypes which drastically shorten settlement cycles.
End-to-end security token platform STGX was released in December 2018. The platform has been designed to handle the issuance, management, and trading of digital assets.
Ong Ye Kung concluded by highlighting how the bill underlines Singapore’s aim to establish a FinTech friendly landscape.
“The Bill is a necessary piece in Singapore’s Smart Nation journey. It will help us build a technologically robust smart financial centre, that preserves stability while facilitating innovation and growth in the payments landscape.”
What do you think of MAS’ efforts to provide a clear regulatory framework for DLT focused enterprises and users? Will the new legislation go on to make Singapore a global leader when it comes to the regulation of digital assets? Let us know what you think in the comments section below.
Image courtesy of The Straits Times.