Move over, Switzerland. Singapore is solidifying its status as a global financial hub. Here’s the latest on the new crypto regulations in Singapore, paving the way for customer safety and solidifying the island state as a modern financial centre.
Understanding these policy shifts is an important aspect of what the future of business operations and retail cryptocurrency trading, worldwide will look like.
Alongside a growing list of rapid financial systems connecting Singapore to the world, the Monetary Authority of Singapore (MAS) has announced new policies for companies offering digital payment tokens (DPTs) such as cryptocurrencies, to retail consumers.
With a growing number of international transaction systems connecting Singapore to the world, the wealthy financial nation can impress big changes on these global platforms.
New laws due in 2024
These new crypto regulations in Singapore will have a big influence on how these providers organise themselves organisations:
- Conflict of Interest Management: DPT providers must identify, mitigate, and clearly disclose potential and actual conflicts of interest
- Listing Criteria: Clear policies, procedures, and criteria governing the listing of a DPT will be published, for consistency and accountability
- Complaint Handling: Effective policies and procedures to handle customer complaints and resolve disputes will be established, for structured conflict resolution
There is also a range of pretty stringent controls on how DPT providers handle retail consumers:
- Risk Awareness Assessment: Before granting access, providers must determine users risk awareness and understanding
- Incentive Restriction: Providers cannot offer incentives to trade in cryptocurrencies
- Transaction Limitations: Financing, margin, or leverage transactions are restricted, and locally issued credit card payments will not be accepted.
- Crypto Assets are Net Worth: The value of DPT held will be factored into determining wealth to be considered as an investor.
Singapore is ushering in a era of crypto legitimacy
As the crypto industry pushes for legitimacy— these legislative changes can’t be ignored.
The new crypto regulations in Singapore will prevent platforms from accepting local credit cards, so financial on-ramping via credit lines will not be supported.
Any platforms avoiding operating under Singapore’s new regulations, risk estranging their customers from off-ramping their crypto into SGD, erasing any financial incentive to retail investors.
The MAS is committed to fostering a positive DPT industry, and will begin to phase these new policies in from mid-2024. With increased oversight, and enhanced transparency & accountability, countering the largely unregulated environment where digital currencies operated discreetly outside banking regulations.
A Global Hub With International Implications
These regulatory changes may cause ripples beyond its borders. In an effort to maintain consistency across their markets, Singapore’s new standards are unavoidable.
So while crafted specifically for the city-state, the regulations end up elevating industry norms abroad as companies adapt to continue accessing the valuable Asian financial hub. By taking a leadership role on prudent crypto governance, Singapore charts a course for the industry worldwide.
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