Singapore has taken steps to expand its crypto regulations by including the custody of tokens and firms involved in fund transfers.
The Monetary Authority of Singapore (MAS) made the announcement on Tuesday as part of its efforts to establish the city-state as an institutional hub for the cryptocurrency industry, according to a report from BNNBloomberg.
The changes to the Payment Services Act will be implemented gradually, starting from April 4.
The MAS aims to enforce “user protection and financial stability-related requirements” through these amendments, the report said.
Singapore Pushes for Crypto Regulation to Address Risks
Singaporean officials have already signed plans to regulate custody services and other crypto-related transfer services in the country.
The move comes as a response to the risks associated with unregulated cryptocurrency speculation that affected the country in 2022.
Since then, Singapore has been reshaping its regulations to encourage the productive use of blockchain technology while curbing excessive speculation by retail investors.
Under the revised rules, service providers facilitating the transmission or exchange of tokens will be subject to regulation, even if they do not physically possess the money or coins involved.
Additionally, companies enabling cross-border transfers will now fall under the ambit of the act, regardless of whether the funds are accepted or received within Singapore.
The MAS highlighted that these measures will allow for the imposition of requirements related to anti-money laundering and countering the financing of terrorism.
Some of these regulatory amendments have been in development for several years and are intended to bring clarity to key aspects of the crypto ecosystem.
Angela Ang, a senior policy adviser at blockchain intelligence firm TRM Labs, told BNNBloomberg that the changes provide regulatory clarity and contribute to the overall development of the crypto industry.
Singapore is competing with other jurisdictions like Hong Kong and Dubai to attract digital asset businesses.
These regulatory frameworks aim to foster innovation while ensuring the protection of investors, taking into account the checkered history of the cryptocurrency industry.
Spot Bitcoin ETFs Boost Crypto Adoption in Singapore
Singaporeans are increasingly viewing Bitcoin in a favorable light, thanks to the recent approval of spot Bitcoin exchange-traded funds (ETFs) in the United States.
According to a recent report from the digital currency exchange Independent Reserve, 39% of Singaporeans have expressed a more favorable view of Bitcoin following the approval of spot Bitcoin ETFs.
The study also revealed that Singaporean cryptocurrency investors are becoming more experienced.
More than half (52%) have been in the market for over three years, and their portfolios are becoming increasingly diverse, with 16% now holding six or more different cryptocurrencies.
This year, 64% of crypto owners reported making profits, a significant increase from previous years, while only 10% experienced losses.
Likewise, a separate report by Seedly and Coinbase, conducted in the fourth quarter of 2023 and encompassing over 2,000 adults, found that 57% of respondents currently hold digital assets.
The majority of respondents said they have invested between US$1,000 and $25,000.
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