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SINGAPORE: Any entity that facilitates the transmission, exchange or storage of digital payment tokens (DPT), also known as cryptocurrencies, will now have to obtain a license after improvements to the Payment Services Act, which was passed on Monday ( January 4).
Such virtual payment providers will be subject to expanded rules and regulations set by the Monetary Authority of Singapore (MAS), Transport Minister Ong Ye Kung said during the second reading of the Payment Services Bill (Amendment) in Parliament.
“This will help minimize the risk of criminals exploiting DPT service providers to launder illicit profits or conceal illicit assets,” said Ong, who is also a member of the MAS board.
MAS currently regulates the service providers that deal with cryptocurrency exchange when they own the money or cryptocurrency.
Under the amendment, the authority’s powers are broadened to include regulatory action on such providers, even if they don’t own the money or cryptocurrency involved.
Speaking on behalf of the Minister in Charge of MAS Tharman Shanmugaratnam, Mr. Ong said that the speed and cross-border nature of activities related to the use of such cryptocurrencies have higher inherent risks of money laundering and terrorist financing.
Cryptocurrencies have been gaining popularity since the launch of Bitcoin in 2009. The world’s largest cryptocurrency was worth $ 33,670 on Monday.
WATCH: Singapore Investors Still Cautious About Crypto, But More Businesses See Profits: Experts | Video
The bill was passed on Monday after a debate involving 10 members of Parliament from both sides of the House.
“The bill will expand the definition of a cross-border money transfer service to include the facilitation of money transfers between people in different jurisdictions, where the service provider in Singapore does not accept or receive money,” said Mr. Ong at the Parliament.
“That way, such service providers will fall under the regulatory purview of MAS even if the money does not flow through Singapore,” he said.
The changes in the law will also give the country’s central bank powers to impose measures on cryptocurrency service providers to “ensure better consumer protection and maintain financial stability and safeguard the effectiveness of monetary policy,” he said. Ong.
The risks posed to consumers are currently negligible due to the relatively low use of such cryptocurrencies in Singapore, he said, although he noted that this could change as industry players introduce products to attract customers.
“We have seen (the) recent development of new forms of DPT (whose) values are linked to stable assets to gain the trust of users. Therefore, it is important that MAS is able to respond to market developments and address new risks in a timely manner, ”he said.
READ: DBS To Launch Digital Exchange As Demand For Virtual Currencies Soars
The amendments to the bill would allow MAS to impose user protection measures on service providers “when necessary,” he said.
“This could include, for example, requiring a DPT service provider to separate the customer’s assets from its own assets,” he said.
The scope of the central bank’s power is “necessarily broad” to allow MAS to respond “flexibly and quickly” in the fast-moving cryptocurrency landscape, Ong said, adding that the authority will consult with the industry when drafting the legislation. subsidiary on specific measures. .
The changes “would improve the regulatory framework for payment services in line with global regulatory standards and allow MAS to be agile and responsive in addressing various risks in the payments landscape,” said Mr. Ong.
