Security Token Regulations in Singapore: The Current Situation

Security Token Regulations in Singapore: The Current Situation

Singapore is clearly becoming one of the leading hubs for the security token sector. However, how far is the country prepared to go?

Security tokens in Singapore currently fall under the country’s Securities and Futures Act (SFA). It is this law which ultimately outlines how to apple for licenses and the stages of fundraising. However, unlike other countries, Singapore has an added legal dimension when it comes to security tokens. The Payment Services Act (PSA) also has jurisdiction over some cryptocurrencies as well.

Together, the SFA and PSA form a dynamic which is quickly being adopted in the country as security token law. Currently, the Monetary Authority of Singapore (MAS) has been eager to ‘test the waters’ when it comes to this regulatory situation. Creating a sandbox environment, they are currently letting exchange self-regulate themselves while monitoring their activities. All they need to do is apply for a license.

This regulatory sandbox period is expected to last throughout 2020, but will allow Singapore to fill in the regulatory gaps much better than other nations. The efforts are already beginning to snowball. In Mid-July of this year, the country’s first regulated private securities exchange launched called 1x. The exchange already features more than $4.1 million worth of tradeable private equity in the form of security tokens.

The launch of 1x is promising, but we will have to see how it will impact other security token exchanges in the country. However, if the regulatory sandbox is a success, we could see a large portion of the industry headquarter themselves in Singapore.

Do you agree that Singapore could become a security token hub? Let us know your thoughts in the comments below.

Image courtesy of SMU Blog.