Singapore Boosts Crypto Rules, Aims for Global Hub Status

Key Takeaway

• Singapore expands digital-asset rules to include token custody and more transfer services, enhancing user protection and financial stability.
• The revised Payment Services Act, effective from April 4, aims to regulate crypto transfers and curb speculation while fostering blockchain innovation.
• Amendments target anti-money laundering and terrorism financing, positioning Singapore as a competitive hub for digital assets alongside Hong Kong and Dubai.

Singapore Tightens Crypto Regulations

Singapore has expanded the scope of its digital-asset rules under the Payment Services Act, effective from April 4, to include the custody of tokens and more firms involved in fund transfers. This move is part of Singapore's broader strategy to develop into an institutional hub for the crypto industry, focusing on user protection and financial stability. The Monetary Authority of Singapore (MAS) aims to encompass services facilitating the transmission or exchange of tokens and companies enabling cross-border transfers under these revised regulations. This expansion is in response to the city-state's experiences in 2022, which saw significant crypto market upheavals affecting local firms and investors.

Addressing Financial Crimes

The MAS's regulatory adjustments also target enhancing measures against anti-money laundering and countering the financing of terrorism. By bringing more crypto-adjacent services under regulatory scrutiny, Singapore intends to mitigate risks associated with the misuse of digital assets for illicit activities. Angela Ang, a senior policy adviser at blockchain intelligence firm TRM Labs, highlighted that these amendments have been in development for years and aim to provide regulatory clarity to crucial parts of the crypto ecosystem.

Building a Productive Digital-Asset Hub

Despite setbacks from major crypto failures in 2022, such as the collapse of Terraform Labs and Three Arrows Capital, Singapore remains committed to fostering a digital-asset hub. The MAS is encouraging projects that leverage blockchain technology for institutional use, aiming to improve payment efficiencies and make illiquid assets more accessible through tokenization. Singapore's approach balances the promotion of innovation with stringent measures to protect investors, particularly retail investors, from the speculative risks traditionally associated with cryptocurrencies.

Street Views

• Angela Ang, TRM Labs (Neutral on Singapore's digital asset regulation):

  "Some of these amendments have been in the works for years and bring regulatory clarity to key parts of the crypto ecosystem."