The Monetary Authority of Singapore has granted its first approval in principle to a digital currency exchange under the new licensing regime, in a move that will see the platform become the first exchange in the country to trade as a fully regulated virtual asset service provider.
Australian digital currency exchange Independent Reserve received the regulatory go-ahead under the provisions of the Payment Services Act, which was brought into law in January 2020. The legislation sets out in clear terms the rules around the regulation of digital currency exchanges, and the guidelines for businesses looking to operate as exchanges within the country.
The MAS, which acts as the country’s de facto central bank, gave the go-ahead in a letter written to the exchange this week. Since the law came into force in January 2020, exchanges have been permitted to operate under exemption, pending successful licensing applications under the new regime.
Independent Reserve has been approved for a Major Payment Institution Licence, which would enable the exchange to act as a provider of Digital Payment Token Services. This brings with it obligations to install adequate consumer protections, as well as compliance with relevant anti-money laundering regulations, including the infamous “travel rule.”
On choosing Singapore, CEO Adrian Przelozny said the company was attracted to the licensing regime, because it “provides certainty for us as industry participants and security for our customers.”
Singapore has also reportedly been a beneficiary of political uncertainty in Hong Kong, driven by increasingly hostile attitudes from Beijing. According to local press, this has helped Singapore mark itself out as a regional centre for the emerging digital currency sector, in combination with its favourable licensing regime.
With the first approval now waved through, it is expected that other firms will ultimately join Independent Reserve in winning the backing of the regulator.
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