MAS Proposes New Regulations to Tighten Crypto Business Activities
Godfrey Benjamin Jul 22, 2020 01:30
The Monetary Authority of Singapore (MAS) has published a consultation paper proposing a new set of regulations that may stiffen the emergence and activities of crypto industries in the country. Despite the proactive strides of the MAS towards the development of the country’s central bank digital currency (CBDC), the apex bank is set to reinforce its regulations on digital currencies.
The Monetary Authority of Singapore (MAS) has published a consultation paper proposing a new set of regulations that may stiffen the emergence and activities of crypto industries in the country.
Despite the proactive strides of the MAS towards the development of the country’s central bank digital currency (CBDC), the apex bank is set to reinforce its regulations on digital currencies.
The new regulation which seeks to “Enhance Effectiveness” in Addressing Financial Sector-Wide Risks has four basic provisions. These provisions give MAS the power to prohibit unsuitable individuals from working in the financial industry. It will also expand the scope of anti-money laundering and countering the financing of terrorism (AML/CFT) requirements to persons in Singapore who provide digital token services overseas in line with the Financial Action Task Force (FATF) guidelines.
In addition, it will strengthen the framework for technology risk management, and enhance the effectiveness of dispute resolution.
How this will impact cryptocurrency businesses
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. Over time, the government of Singapore has been proactive in calling out crypto-related scams to guard its citizens for scandalous investments.
With enhanced powers, the MAS will also have extensive oversight responsibilities on indigenous crypto firms who conduct businesses abroad. The consultation paper reads:
"Given the internet-based nature of such operations, there may be entities created in Singapore that do not perform such services in Singapore but offer such services outside of Singapore and that are not captured under current legislation. MAS intends to regulate such entities for ML/TF [money laundering/terrorist financing] risks."
As evident in recent times, the Monetary Authority of Singapore is pacing faster in its CBDC Project Ubin development which successfully completed an International settlement earlier this month. While the new regulation appears strict, it will help legitimate crypto businesses thrive as the MAS has acknowledged the role of blockchain technology as the future of the financial sector.
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