SINGAPORE: Any entity that facilitates the transmission, change or storage of digital cost tokens (DPT) – in any other case referred to as cryptocurrencies – will now must be licensed following enhancements to the Fee Providers Act, which was handed on Monday (Jan 4).
Such digital cost suppliers will likely be topic to expanded guidelines and laws set by the Financial Authority of Singapore (MAS), mentioned Minister for Transport Ong Ye Kung in the course of the second studying of the Fee Providers (Modification) Invoice in Parliament.
“This may assist minimise the chance of DPT service suppliers being exploited by criminals to launder illicit proceeds or cover illicit property,” mentioned Mr Ong, who can be a board member of MAS.
MAS at present regulates service suppliers which take care of the change of cryptocurrencies after they possess the cash or cryptocurrency.
Beneath the modification, the authority’s powers are expanded to incorporate regulatory measures on such suppliers even when they might not posses the cash or cryptocurrency concerned.
Talking on behalf of Minister-in-charge of MAS Tharman Shanmugaratnam, Mr Ong mentioned that the pace and cross-border nature of actions associated to the usage of such cryptocurrencies have increased inherent cash laundering and terrorism financing dangers.
Cryptocurrencies have been gaining reputation for the reason that launch of Bitcoin in 2009. The world’s largest cryptocurrency recorded a price of US$33,670 on Monday.
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The Invoice was handed on Monday after a debate which noticed 10 Members of Parliament from each side of the Home taking part.
“The Invoice will broaden the definition of cross-border cash switch service to incorporate facilitating transfers of cash between individuals in several jurisdictions, the place cash just isn’t accepted or obtained by the service supplier in Singapore,” mentioned Mr Ong in Parliament.
“That method, such service suppliers will come beneath the regulatory ambit of MAS even when the moneys don’t circulation by means of Singapore,” he famous.
Modifications to the regulation may also see the nation’s central financial institution supplied with the powers to impose measures on cryptocurrency service suppliers to “guarantee higher client safety and to keep up monetary stability and safeguard the efficacy of financial coverage”, mentioned Mr Ong.
The dangers posed to shoppers are at present insignificant because of the comparatively low utilization of such cryptocurrencies in Singapore, he mentioned, although he famous this might change as trade gamers introduce merchandise to draw prospects.
“We now have seen (the) latest growth of latest types of DPTs (whose) values are pegged to steady property to achieve customers’ confidence. It’s subsequently essential for MAS to have the ability to reply to market developments and tackle new dangers in a well timed method,” he mentioned.
The amendments to the Invoice would enable the MAS to impose person safety measures on service suppliers “when needed”, he mentioned.
“This might embrace, for instance, requiring a DPT service supplier to segregate buyer property from its personal property,” he mentioned.
The scope of the central financial institution’s energy is “essentially broad” to permit MAS to reply “flexibly and swiftly” within the fast-moving cryptocurrency panorama, mentioned Mr Ong, including that the authority will seek the advice of the trade when drafting subsidiary laws on the precise measures.
The modifications would “improve the regulatory framework for cost companies according to world regulatory requirements and can enable MAS to be nimble and responsive in addressing numerous dangers within the funds panorama,” mentioned Mr Ong.