Singapore is introducing new payments legislation that offers global cryptocurrency firms for the first time, to apply for operating licences that will better standardise the industry. The government hope that it will give companies in the city-state a chance to expand their operations.
Implementation of The Payment Services Act
The Payment Services Act, which came into force earlier this year in January, is the first comprehensive directive for companies handling digital payments and blockchain technology, to activities trading of tokens such as Bitcoin and QTUM. The aim is to safeguard against money laundering and terrorism financing, as well as bolster consumer protection, cyber security and encourage faith in the use of e-payments.
The Act brings providers of digital payment token services, more commonly known as cryptocurrency dealing or exchange services, into the regulatory fold under the scope of MAS (the Monetary Authority of Singapore).
Increased investor interest in digital tokens and blockchain has inspired several regulators around the world to bring the venues under their inspection, particularly for money laundering and other prohibited activities. Under the Payment Services Act, mobile wallets like GrabPay cannot hold more than SGD $5,000 at any point in time.
Singapore to become the new Digital Currency Hub
Japan has previously been the Asian forerunner as a major centre for cryptocurrency trading after 22 exchanges received licences there since 2017. New legislation ‘provides regulatory certainty to industry players but, more importantly, it provides consumers with a clear sense of the players they can trust’, a representative from a Singapore based platform commented.
According to Crunchbase data, 20 of the top 50 crypto exchanges are based in the Asia-Pacific region and accounted for about 40% of Bitcoin transactions in the first half of last year.
Binance Holdings Ltd, operator of one of the world’s largest crypto exchanges, has an office in Singapore and is backed by 100% Singapore Investors. A spokesman for Binance Holdings Ltd, declined to comment on whether the firm will seek a Singapore licence.