Singapore Central Bank Closing In On New Regulatory Framework For Cryptocurrencies Payment Services

Singapore has inched a step closer to regulating the cryptocurrency sector. The country’s central bank, Monetary Authority of Singapore, has completed a regulatory framework for crypto payment services.  Under the Payment Services Bill, MAS is to replace two existing legislations.

Payment Services Bill

The new bill has already passed through two public consultations and could soon become law.  The bill proposes ways of safeguarding consumers funds as well as counter-terrorism financing. It should also go a long way in bolstering cyber security in relation to cryptocurrency use.

The Payment Services Bill will affect the way e-Wallets and digital payment tokens operate in the country.  The bill comprises of two parallel structures. The first structure gives the central bank the right to regulate some crypto payment services it deems are crucial.

Digital payment service will have to apply for one of three licenses to offer services in the country.  Under the ‘mandatory licensing ‘scheme, the payment service providers will have to apply for licenses depending on the nature of their offerings.

The first license dubbed ‘money changers’ seeks to curb the use of cryptocurrencies for money laundering or terrorist financing.  Institutions that transact over $3 million will have to apply for a more comprehensive standard payment license.  A ‘major payment’ institution license is available for larger service providers.

Some of the activities that the bill will regulate include the issuance of accounts as well as electronic money. The bill will also regulate the transfer of cryptocurrencies in and out of the island nation. It will also regulate merchant acquisition in platforms as well as the exchange and dealing of crypto tokens.

Singapore Crypto Regulation

The Payment services Bill should come into effect next year. Those who provide digital payment tokens will have six months to comply. Twelve months is the amount of time that payment service providers will have to comply with the new regulations. The unveiling of the bill comes on MAS managing director, Ravi Menno reiterating the need to improve crypto regulation.

Increased regulation by the Central bank comes on growing concerns about the potential risks cryptocurrencies pose. For starters, some countries have instituted bans on cryptocurrencies on fears they are fueling money-laundering activities.

The fact that cryptocurrencies facilitate anonymous transactions has also fueled fears that some people are using them to finance terrorism.