Singapore: New payment legislation will ease global crypto-firms into the country

Global cryptocurrency firms that are looking to expand their operations in Singapore will have the chance to do so by applying for operating licenses for the first time, a move that is made possible by the newly introduced new payments legislation.

On Tuesday (28 Jan), the new act, called the Payment Services Act officially comes to force as the first comprehensive regulation for companies involved in activities spanning from token trading and digital payments of cryptocurrencies such as Ether or Bitcoin. The new act will afford the Monetary Authority of Singapore formal supervisory controls on terrorism, money laundering and cyber security risks, as well as placing crypto-firms under the framework of regulation.

The new regulation will allow Singapore to close the gap with Japan as a major cryptocurrency trading centre in Asia after 22 exchanges obtained licenses there since 2017. Due to the deepening interest in digital tokens among investors, several regulators worldwide now bring the centres under their supervision to combat illicit activities such as money laundering.

Nizam Ismail, the founder and chief executive officer of a compliance consultancy firm, Ethikom Consultancy remarked that the key advantage of the country’s new regulation is in enhancing regularity clarity on new types of payment activites like cryptocurrency exchanges and e-wallets.

Already operating in the country, London-based bitcoin-related company Luno and Tokyo-based crypto exchange operator Liquid Group Inc are some of the firms which are looking to apply for the licenses. Liquid’s CEO Mike Kayamori does “welcome the Act with open arms” and the firm will apply through its local Quoine Pte subsidiary.

Luno’s Singapore general manager Sherry Goh remarked that the Act “provides regulatory certainty to industry players but, more importantly, it provides consumers with a clear sense of the players they can trust.” In 2019, Luno procured an operating license in Malaysia.

According to data from Chainalysis, a blockchain analysis company, 20 of the top 50 crypto exchanges are based in Asia-Pacific region and they make up of approximately 40% of Bitcoin transactions in the first half of 2019.

Binance Holdings Ltd., which is one of the largest crypto exchanges globally, also has an office in Singapore. Vertex Venture Holdings Ltd., the venture capital arm of Singapore-based Temasek Holdings Pte, is a backer of Binance Holdings Ltd. Upon questioning whether the firm is going to procure a Singapore license, Binance spokesperson, Kathy Zhu, has declined to answer.