In January 2020, Singapore was able to implement the Payment Service Act and the Monetary Authority of Singapore (MAS) has been in charge of the cryptocurrency industry since then.
However, the financial services regulator has suggested the implementation of stricter regulations for the cryptocurrency industry in the country.
The new law suggested by the MAS is to enable it oversee firms based in the country, even if they are not offering services to native customers. One of the things achieved through the Payment Act is the enforcement of FATF guidelines for cryptocurrency operations.
When the Payment Services Act became effective in January, the MAS started ensuring service providers’ compliance with the FATF recommendations for virtual asset service providers (VASPs).
According to the stipulations of the FATF guidelines for cryptocurrencies, regulation must be by the jurisdiction where it’s created. That is, all service providers must be regulated by at least one oversight authority without regard to the scope of their international coverage as well as where the firm offers its services.
Unfortunately, cryptocurrency regulations are still ill-defined in some countries while some firms are not readily conforming to an existing set of rules. Likewise, regulators worldwide are working on the regulation of the cryptocurrency space in their countries. The reason is not far-fetched as the cryptocurrency space remains nascent and regulators are trying to catch-up.
Hence, if the new law suggested by the MAS becomes effective in the country, the MAS would be empowered to deal in or facilitate the exchange of digital currencies. Likewise, it will be overseeing firms that provide advisory services to those who hold cryptocurrency and those who provide storage and custodial services.
They intend to apply the proposed law to cryptocurrency firms incorporated in Singapore, having a minimum of one director based in the country as well as a permanent place of business, or was established through the formation of a partnership.