Singapore’s new payment legislation that will offer an operating license for cryptocurrency firms to expand their operation in the country is coming into effect today, according to a report by Bloomberg.
The Payment Services Act (PSA) will offer a regulatory guideline for companies handling activities ranging from digital payments to the trading of tokens such as Bitcoin, Ethereum and Litecoin.
Additionally, the law will also hand the Monetary Authority of Singapore (MAS) with supervisory powers for cybersecurity risks, money laundering, and terrorism financing.
“The key advantage of Singapore’s new legislation is providing regulatory clarity on new types of payments activities such as e-wallets and cryptocurrency exchanges,” said Nizam Ismail, founder of Ethikom Consultancy, a Singaporean compliance consultancy focusing on helping fintech and blockchain-based companies grow in Asia.
Pak Teng Chow, CEO of Blockspace Asia, a platform for startups and SMEs driven by blockchain, artificial intelligence (AI), and deep tech, has also expressed his support for the law.
“This is a great initiative to push out and to make Singapore a market leader in the SEA tech space,” he told e27.
“It will make the barrier of entry higher for companies who want to step in the space to come up with quality solutions and therefore get rid of all of the bad apples that have been around. It is also great that MAS is giving a time frame for companies to first apply for the license and then to comply with it over time,” he noted.
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According to Chinalysis data, about 40 per cent of crypto exchanges are based in the Asia Pacific region and have accounted for about 40 per cent of Bitcoin transactions in the first half of last year.
Increased investor interest in digital tokens over the past few years has encouraged several regulators to bring the venue under their scrutiny, especially for money laundering and other illicit activities. However, with the new transparent law, Singapore will further attract a pool of investors, founders from the crypto community.
The legislation will “provide regulatory certainty to industry players but, more importantly, it will provide consumers with a clear sense of the players they can trust,” said General Manager Sherry Goh of Luno, a London-based firm who are deemed as one of the first firms to apply for the license.
This will alternatively mean that current crypto firms operating will now have to spend a considerable amount of money to apply for the new license, an undisclosed source told e27.
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