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Cryptocurrency Regulations in Singapore

Cryptocurrencies: Not legal tender

Cryptocurrency exchanges: Legal, registration with the Monetary Authority of Singapore required

In Singapore, cryptocurrency exchanges and trading are legal and the city-state has taken a friendlier position on the issue than some of its regional neighbors. Although cryptocurrencies are not considered legal tender, Singapore’s tax authority treats Bitcoins as “goods” and so applies Goods and Services Tax (Singapore’s version of Value Added Tax). The Monetary Authority of Singapore (MAS) has adopted a neutral position on the growth of cryptocurrencies: in 2017 it clarified that, while it would not seek to regulate virtual currencies, it would regulate digital payments tokens (DPT) if those tokens were classified as “securities”. Although it has taken an even-handed approach to date, in 2020 MAS issued warnings to the public of the risks of investing in cryptocurrency products. 

Cryptocurrency Regulations Singapore

Cryptocurrency Exchange Regulations

MAS’ generally soft approach to cryptocurrency exchange regulation has led it to apply existing legal frameworks where possible. In January 2018, MAS issued a press release warning the public of the risks of speculating with cryptocurrency, while Deputy Prime Minister Tharman Shanmugaratnam stated that cryptocurrencies are subject to the same AML and CFT measures as traditional fiat currencies. A year later, the Payment Services Act 2019 (PSA) was passed, bringing exchanges and other cryptocurrency businesses under the regulatory authority of MAS from January 2020, and requiring them to obtain a MAS operating license. 

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Future Cryptocurrency Regulations

With the PSA having only recently taken effect, there will inevitably be an adjustment period as crypto businesses adapt to the new legislative environment. The PSA is, in many ways, aligned with FATF’s most recent recommendations, however, MAS is likely to follow up with additional regulations in an effort to further align its position. With that in mind, in July 2020, MAS proposed new financial sector regulations with consequences for the crypto industry: under the proposals, MAS is seeking to introduce stronger AML/CFT standards for cryptocurrency service providers and higher requirements for technology risk management in financial institutions.

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