Business 20 November 2018

Erik Gibbs

Singapore’s new payment services regulations include crypto coverage

Singapore is proactively working to implement changes that will foster a positive environment in which cryptocurrencies can flourish in the country. In October, the Monetary Authority of Singapore (MAS) announced an effort that was meant to bring banks and crypto operators together and, now, the country is introducing new payment services regulations that will cover crypto exchanges, as well.

According to a publication on the government’s website, a new bill looks to introduce regulatory framework that will give the MAS the ability to regulate seven types of payment services. Among them is cryptocurrency payment token services. That bill, the Payment Services Bill, has already made its first appearance in front of Parliament.

The bill looks to expand the control of regulated payment services given to the MAS. It specifically authorizes the agency to regulate payment services in relation to several risks, including money laundering and terrorism financing, limitations to interoperability, loss of consumer or merchant funds due to insolvency and risks associated to cyber-attacks.

The bill is divided into two parts—the designation framework for payment systems and the licensing framework for payment service providers. The first framework will give the MAS the ability to assign particular payment systems, as well as to regulate operators and settlement institutions. The second authorizes the MAS to regulate payment services provisions, including account issuance, cross-border and domestic money transfers, eCommerce issuance services and merchant acquisition services, among others.

The bill specifically defines a “digital payment token service” as the practice of “buying or selling digital payment tokens (commonly known as cryptocurrencies), or providing a platform to allow persons to exchange digital payment tokens in Singapore.”

According to the bill, “To ensure that the objects of the Bill are met, MAS will have general powers over all regulated entities, including powers to conduct inspections and investigations, and emergency powers. The Bill will require regulated entities to comply with general requirements relating to corporate governance, capital adequacy and business conduct.”

The move could help Singapore take a leading spot among the jurisdictions favorable to cryptocurrency’s future role as a viable alternative to fiat. It could also assist the country in becoming the first country to fully accept cryptocurrency, as it said it wanted to do this past September.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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