In Singapore, cryptocurrency exchanges and trading are legal, and the city-state has taken a friendlier position on the issue than regional neighbors.
Although cryptocurrencies are not considered a legal tender, Singapore’s tax authority treats Bitcoins as ‘goods’ and so applies Goods and Services Tax (Singapore’s version of Value Added Tax).
Cryptocurrencies: Not legal tender
Cryptocurrency exchanges: Legal, no registration required
The Monetary Authority of Singapore (MAS) takes a relatively soft approach to cryptocurrency exchange regulations, applying existing legal frameworks where possible.
In January 2018, however, MAS issued a press release warning the public of the risks of crypto speculation and Sopnendu Mohanty, MAS FinTech chief, indicated that further legislative steps would be needed in order for cryptocurrencies to continue to grow. Chief amongst MAS’ concerns is the need to ensure that cryptocurrencies are not used for money laundering, terrorist financing, or other financial crimes.
MAS continues to keep a close eye on cryptocurrencies.
In addition to potential additional AML/CFT measures, in March 2018 it was reported that the financial authority was working on more robust cryptocurrency regulations specifically to protect investors.
The Payment Services Act (PSA) in Singapore, which came into effect on January 28, 2020, stated that cryptocurrency businesses must obtain a license from MAS to comply with AML/CFT regulations.
This expands to businesses that both transfer cryptocurrency within Singapore and outside of Singapore.
In July 2020, MAS proposed a new set of regulations that will affect the cryptocurrency industry in the country. The new regulations will consist of four provisions:
- A harmonized and expanded power to issue prohibition orders
- An addition to existing AML/CFT regulations on cryptocurrencies
- A harmonized power to impose requirements on technology risk management
- Providing mediators, adjudicators and employees of an operator of an approved dispute scheme with statutory protection from liability
In essence, this means MAS will have the power to forbid unsuitable individuals from working in cryptocurrency businesses.
Godfrey Benjamin, from Blockchain News, states that “The move by the MAS will go a long way in protecting Singaporeans from unsuitable entities who can increase the risk already associated with the crypto ecosystem.”
This signals the MAS’ intent in wanting to clamp down on financial crime in cryptocurrency businesses in Singapore, as it is emerging as a key hub in Asia for cryptocurrency.