The Monetary Authority of Singapore, the country’s central bank, is pressing ahead with regulation that will bring a handful of retail payment services, including bitcoin and cryptocurrency exchanges, under a single legislation.
With an announcement on Tuesday, the Monetary Authority of Singapore (MAS) launched the second consultation on its Payment Services Bill, a payments regulatory network proposing to streamline the regulation of all payment services under a single legislation. Notably, the proposed bill is also seeking to bring virtual currency services, like bitcoin exchange platforms, under regulatory purview. As regulator, the MAS will have oversight to look into money laundering and terrorism financing risks as well as ensuring safeguards for consumers’ funds.
When enacted, payment firms, as well as bitcoin exchanges, will be required to hold only one license under the new regulatory framework.
“The new framework will expand the scope of regulation to include domestic money transfers, merchant acquisition and the purchase and sale of virtual currencies,” reads an excerpt from MAS’ announcement. “Only payment activities that face customers or merchants, process funds or acquire transactions, and pose relevant regulatory concerns will need to be licensed.”
MAS managing director Ravi Menon said of the framework:
We want to put in place a forward-looking regulatory regime to encourage wider adoption of secure e-payment solutions. The novel, activity-based licensing framework aims to right-size regulatory requirements to address the risks posed by specific payment activities. This will help to protect consumers and merchants while creating an environment conducive for innovation in payment services.
The second consultation is now open to public feedback and will run up to January 8, 2018.
While Singapore’s largest bank (also state-owned) DBS labelled in recent weeks bitcoin a ponzi scheme, central bank chief Menon highlighted cryptocurrencies’ potential beyond a store of value in applications like cross-border payments. “If it [cross-border remittance] was going through a blockchain using cryptocurrencies, it could yield benefits,” Menon said. “That ought to be the question, rather than whether bitcoins or ether are going up in value or not,” he added, insisting that bitcoin itself did not pose any risks requiring regulation. Rather, it’s the activity around it, like a bitcoin exchange or trading platform that would see regulation, according to the central banker.
Featured image from Shutterstock.