The Republic of Singapore has approved a bill that stiffens the rules regarding cryptocurrency businesses in the country. On Tuesday, April 5, 2022, the country’s Parliament passed the Financial Services and Markets Bill which mandates the licensing of all virtual asset service providers which operate solely outside the country.
With respect to the newly passed bill, the country’s central bank, the Monetary Authority of Singapore ( MAS) will regulate virtual assets service providers based in Singapore but operational only outside the city-state. This bill aims to prevent the perpetration of money laundering and financing of terrorist acts by these businesses. It is worth noting a similar law is already in place for firms like this that operate within the nation.
“Virtual asset service providers created in Singapore that provide services only elsewhere are unregulated for anti-money laundering and countering the financing of terrorism (AML/CFT), which creates reputational risk for the Republic,” said Alvin Tan, a board member of the MAS.
Furthermore, the Asian country’s government demands a high level of security from financial institutions through the newly approved law, which imposes a penalty on them should they become victims of cyber attacks or have their operations disrupted. The sanction could be levied in a variety of amounts, up to S$1 million. In addition, the bill empowers the country’s central bank to bar individuals it deems incompetent from “performing key roles, activities, and functions in the financial industry.”
As a country, Singapore has so far been welcoming to the novel technology of cryptocurrency and other digital assets. 43 percent of the country’s citizens own cryptocurrency per a survey report by Asia-Pacific cryptocurrency exchange Independent Reserve in July 2021. In February 2022, it was also rated as the most-friendly crypto nation by Coincub, a global crypto ranking firm.
This rapid adoption has also been aided by the country’s government, which, unlike some countries that have outright banned cryptocurrency, has set up various regulations – such as the Payment Services Act implemented in 2020 – to oversee operations in its cryptocurrency sector to protect the interests of investors – its citizens – and to counter illegal activities in the sector.
It is worth noting, however, that while the Singaporean government embraces the thriving cryptocurrency and digital asset market, they do so with caution. As recently as January of this year, the Money Authority of Singapore presented a set of rules prohibiting crypto firms from making general public advertisements.