Singapore Tightens Crypto Regulations with New Financial Institution Bill

January 17, 2024

By Sharan Kaur Phillora

The Monetary Authority of Singapore (MAS) is set to strengthen its regulatory control over the cryptocurrency industry with the introduction of the Financial Institution (Miscellaneous Amendment) Bill 2024. This new legislation targets firms holding Capital Markets Services Licenses (CMSL) engaged in decentralized operations like payment token products and Bitcoin futures.

Here’s what we know:

If passed by the parliament, this bill will significantly expand MAS’s authority over crypto firms operating decentralized derivatives and products. This move marks a crucial step in regulating crypto derivatives like BTC futures and other payment token-related derivatives, which are currently unregulated and often traded on offshore exchanges.

The primary aim of the new bill is to mitigate the potential risks these unregulated crypto derivatives pose to exchanges’ regulated activities. MAS has previously taken steps to reduce the risks of retail investments in unregulated business dealings. The new bill will empower MAS to set minimum protocols and issue directives concerning these unregulated operations.

Additionally, the bill aligns with MAS’s efforts to maintain a robust regulatory framework in the rapidly evolving digital asset exchange landscape. This includes issuing guidelines in November to curb speculative investments in digital assets and adjusting to regulatory standards for stablecoins in August 2023, aiding Ripple and Circle in obtaining their MPI permits.

The proposed legislation also enhances MAS’s investigative capabilities, allowing it to compel individuals to conduct interviews, demand document submissions, and enforce court orders for evidence seizure. It also authorizes MAS to collaborate with foreign regulators investigating financial institutions in Singapore.

The bill is poised to significantly reshape the regulatory landscape for crypto assets in Singapore. By increasing MAS’s oversight, the aim is to ensure firms with MPI licenses and CMSL adhere to regulatory standards focused on consumer protection and financial stability.

Crypto exchanges and related firms will likely see changes in their operational processes, aligning with the stricter protocols and guidelines MAS sets. The focus on unregulated business dealings addresses major concerns about the lack of regulatory presence and transparency in the crypto market.

About the author

Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.

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