Singapore is a hub for cryptocurrencies with many crypto exchanges and startups. Moreover, as Singapore has become a popular location for trading, it is also an important location for the global crypto market.
It is now estimated that in the fourth quarter of 2021, the crypto trade volume in Singapore was about $595.5 million. This was a lot more than the double of the previous quarters.
However, in Singapore, crypto trading is not regulated by the government. The government has been considering regulating cryptocurrency-related activities to protect investors from scams and frauds.
- Cryptocurrencies: Not Legal
- Cryptocurrencies exchange: Legal. However, you need to register with the Monetary Authority of Singapore.
In Singapore, cryptocurrency rules mean that (DPT) digital payment tokens are not considered a legal tender yet, so Bitcoins are considered goods rather than an acceptable mode of payment; so it has Goods and Services Tax applied to them.
The MAS has said that there are risks associated with cryptocurrencies and that they are no longer just a fad, so they have adopted a neutral position on the growth of cryptocurrencies. They embrace the approach to regulating cryptocurrencies rather than banning them.
Singapore Cryptocurrency Exchange Regulations
Singapore has a strict regulatory system for cryptocurrency exchanges.
The Singaporean government has enforced the regulation of cryptocurrency exchanges, which can indicate how the government views cryptocurrencies.
The MAS has been monitoring the cryptocurrency market for years, when it issued warnings on Initial Coin Offerings (ICOs) and cryptocurrencies. In addition, MAS issued an advisory on virtual currencies and [provided guidelines for businesses that deal with them.
In January 2018, the Monetary Authority of Singapore (MAS) issued a press release warning the public of the risks of speculating with cryptocurrency. The press release was issued in response to several individuals, and companies misled into investing in cryptocurrencies.
The Payment Services Act 2019 (PSA) was passed on the 17th of January, 2019; it brought exchanges and other cryptocurrency businesses under MAS’s regulatory authority.
Future Cryptocurrency Regulations
Cryptocurrency regulations in Singapore have changed ever since PSA came in place - they are now aligned with the FATF (Financial Action Task Force) guidance. However, MAS is currently working towards seeking to achieve even more convergence.
These new regulations will revolve around a more robust CFT standard for cryptocurrency service providers. Moreover, they aim to provide a better and stronger technology for risk management that can likewise help financial institutions.
With the recent boom in cryptocurrencies, Singapore has been trying to regulate them. It is one of the few countries that have taken a proactive approach to regulate cryptocurrency services.
So the recent efforts taken by Singapore to regulate cryptocurrency services have helped gain the attention of international crypto-space businesses. The Singapore government believes that this regulation is necessary to maintain public interest, protect investors, and prevent scams.
Many high-profile Chinese cryptocurrency enterprises, including ByBit, Huobi, Cobo, and OKCoin, relocated to Singapore following China’s ban on cryptocurrency businesses in 2021.