Singapore Monetary Authority May Issue New Rules for Cryptocurrencies

This was revealed by Mr. Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of MAS.

On October 3, Mr. Tharman Shanmugaratnam issued a letter, answering several questions of Parliamentarian Cheng Li Hui, who, among others, had asked whether the Singaporean Government was monitoring the use of cryptocurrencies and whether regulatory frameworks were needed.

The Deputy Prime Minister said in his letter that most jurisdictions, including MAS, don’t directly regulate cryptocurrencies. However, MAS regulates cryptocurrency-related activities when these fall within its legal target. Some of these activities relate to terrorism financing and money laundering, and cryptocurrencies can contribute to these, given the anonymous nature of the transactions. The official revealed that MAS

“was working on a new payment services regulatory framework that will address these risks.”

Another set of activities that falls within the regulatory ambit are initial coin offerings (ICOs), but only when they are structured in the form of securities. In this case, the ICO is obliged to activate under MAS securities laws, which are general and don’t address ICOs specifically.

Some of the obligations for ICOs are: “the requirements of having to register a prospectus, obtain intermediary or exchange operator licenses.”

He said that MAS would continue to monitor ICOs, and come up with more targeted legislation if needed.

On the subject of cryptocurrency existence and prevalence in Singapore, Mr. Tharman Shanmugaratnam responded that cryptocurrency has emerged as a new, digital means of payment, secured by cryptography, but it is not a legal tender.

According to him, some communities trust cryptocoins and use them in trade, especially Bitcoin and Ethereum. However, their use is not common – there are over 20 retailers and merchants in Singapore that accept Bitcoin today. He compared the current situation in Singapore with Japan, where cryptocurrencies are more popular.

Mr. Shanmugaratnam added that virtual currencies are also used for speculative investments, but the volume is insignificant, compared to other marketplaces like the US, Hong Kong, or Japan.

Earlier, we reported on Singapore hosting the first consortium in South East Asia to develop and test a blockchain-based technology for KYC processes.