Singapore, which is the leading economy in Southeast Asia, has long been known for welcoming innovations, specifically in the fintech industry as a fuel to navigate growth. With the adoption of innovation arrives a forward looking innovation of digital currencies and blockchains, that attract startups from across the globe, with Singapore holding the second most famous nation for the ICOs in 2018. With that, let us have a look at the Singapore crypto policy and where it is taking the crypto to.
This approach of Singapore towards crypto has contrasted with that of China, where the use and mining of digital currency are completely banned, and also to that of the United States, where the Securities And Exchange Commission aims to impose enforcement, following the boom of the ICO. Let us have a look at some of the MAS cryptocurrency guidelines.
Singapore Crypto Policy: Few Doubts Answered
It looked to the outside market that until lately, Singapore was leading the path in crypto. According to a report from the last summer, as several parts of the globe was determined on cracking down on digital currencies,
“crypto players like Binance have found Singapore to be a paradise of opportunity, even while a regulation storm looms over the industry in other parts of the globe.”
Even as late as last October, after more restrictions on crypto in China, Singapore was witnessed as a chief beneficiary of fleeing the business. These liberal states remained even as more than 300 digital currency companies waited for receiving a MAS cryptocurrency license to function in Singapore under the Payment Service Act (PS Act) 2020, following the 2019 legislation of Singapore cryptocurrency regulation MAS (Monetary Authority of Singapore).
A positive 2020 report that the idea of offering a temporary exemption from licensing under the latest law resulted in “regulatory acceptance”. This is coupled with the robust regulation of Singapore. Ensured it is
“likely to make the country a haven for crypto exchanges and startups over the next few years.”
Is Crypto Legal In Singapore?
Yes, digital currency is legal in Singapore for both trading and owning purposes. This nation has been on the forefront for accepting and implementing the technology of crypto and blockchain and also DLT along with other nations Estonia and Switzerland.
AML Singapore Crypto Policy
In Singapore, AML regulations related to crypto are stated in Notice PSN02 that is issued by the MAS (Monetary Authority of Singapore) and further illustrated by MAS’ Guidelines to Notice PSN02. The Notice presents a structure for the safeguard of money laundering and countering the financing of terrorism for virtual payment token service suppliers. As per the Payment Services Act (2019) (First Schedule, Part 3), a virtual payment token service is any service that deals or facilitates the exchange of digital payment tokens.
Who Regulates Digital Currency In Singapore?
The Monetary Authority of Singapore (MAS) is the integrated financial regulator and the central bank of Singapore. It is liable for supervising all financial institutions based in Singapore and for controlling the financial services sector. This also includes regulation of virtual payment token services and oversight of providers of relevant services.
Singapore Crypto Policy: Government’s Take On Crypto
As far as the Singapore crypto policy is concerned, Singapore provides a rational regulatory and legal space for digital currencies. The MAS (Monetary Authority of Singapore), which is the financial regulatory body of Singapore, considers in regulating the digital currency ecosystem to monitor any risks related to crypto actions, like terrorist financing or money laundering, while also making sure that it does not hamper innovation. The statement stated by the Deputy Prime Minister of Singapore, Tharman Shanmugaratnam in an interview, most accurately covers the attitude of Singapore towards cryptos,
“We will continue to encourage experiments in the blockchain space that may involve the use of cryptocurrencies. Some of these innovations could turn out to be economically or socially useful. But equally, we will stay alert to new risks.”
In accordance with this, MAS has been operating towards controlling cryptocurrency exchanges functioning in Singapore. At the same time, MAS has also raised warnings to investors and the public of the risks that are associated with investing in crypto products. This country has also been experimenting with the technology of blockchain for the development of digital currency and digital payments. Under the Ubin project, the Monetary Authority of Singapore is partnering with blockchain technology entities and financial institutions to conduct inter-bank payments using the blockchain technology. As of now, there is no Singapore government cryptocurrency.
Legally, this nation provides a neutral regime for the evolution of transactions that involve digital currency. Singapore crypto policy is commonly availed as the governing law in digital currency related contracts as its advanced dispute resolution laws, and a reputation for being a mediation friendly and neutral regime. Along with that, digital currencies are legal in Singapore, and hence, any contract that involves digital currencies would not be thought of as illegal. This has been the primary reason for Singapore to have developed as the digital currency hub in Asia.
Singapore Crypto Policy: Exchange Regulation
The general soft approach of MAS to digital currency exchange regulation has resulted in applying prevailing legal structure where possible. In January 2018, MAS published a press release cautioning the public of the risks of imagining with digital currency, while Deputy Prime Minister Tharman Shanmugaratnam mentioned that digital currencies are subject to the similar CFT and AML measures as traditional fiat currencies. The next year, the Payment Services Act 2019 (PSA) was issued, bringing exchanges and other crypto businesses under the regulatory authority of MAS from January 2020, and needing them to get a MAS operating license.
The Closing Line
In Singapore, digital currency exchanges and trading through the Singapore cryptocurrency platform are considered legal and the city-state has taken a more favorable position on the matter than some of its regional neighbors. Even though digital currencies are not thought of as legal tender, the Singapore crypto tax authority of Singapore treats Bitcoins as “goods” and so applies the Goods and Services Tax under the Singapore crypto policy. The MAS (Monetary Authority of Singapore) has accepted a neutral position on the evolution of digital currencies: in 2017 it cleared that, while it would not need to regulate digital currencies, it would regulate virtual payments tokens (DPT) if those tokens were segmented as “securities”. Even though it has taken an even-handed approach to date, in 2020 MAS published warnings to the people of the risks that are associated with investing in digital currency products.