05 Jan 2021
Measures to better counter money laundering and terrorism financing were approved yesterday, under changes to the law that regulates virtual payment service providers.
These changes will also strengthen laws governing digital payment tokens (DPTs) to ensure that companies issuing such tokens protect the assets of their users, said Transport Minister Ong Ye Kung, who is a Monetary Authority of Singapore (MAS) board member.
Parliament passed the Payment Services (Amendment) Bill yesterday, following a roughly two-hour debate that saw 10 MPs taking part.
Under the changes, Singapore will implement enhanced standards for virtual asset service providers who deal in DPTs, otherwise known as cryptocurrencies.
Cryptocurrencies have been gaining popularity internationally since the introduction of the first one, bitcoin, in 2009. Over the past weekend, it was reported that bitcoin saw its price pass US$30,000 for the first time, based on data compiled by Bloomberg news agency.
Previously, MAS regulated cryptocurrency service providers only when they possessed money or the cryptocurrency itself – but this has now been expanded.
Under the Bill, MAS has the power to regulate service providers that facilitate the use of cryptocurrencies for payments, and who may not possess the money or cryptocurrencies involved.
This will cover three activities: facilitating the transmission of cryptocurrencies from one account to another; custodial services for cryptocurrencies; and facilitating the exchange of cryptocurrencies where the service provider does not come into possession of the moneys or cryptocurrencies involved.
Although the use of cryptocurrency has yet to fully take off in Singapore, Mr Ong noted that the speed and cross-border nature of cryptocurrency activities carry higher inherent money laundering and terrorism financing risks.
They need to be regulated, and service providers must carry out proper customer due diligence and monitoring of transactions.
“Global standards setting bodies, regulators and policymakers around the world are focused on addressing these risks,” he said.
“As a major financial centre and fintech hub, Singapore has played an active role in shaping international standards, including at the Financial Action Task Force which sets standards for combating money laundering and terrorism financing risks.”
Mr Ong added that the Bill will broaden the definition of cross-border money transfer services to include facilitating transfers of money between persons in different jurisdictions, where money is not accepted or received by the service provider in Singapore.
By Hariz Baharudin, The Straits Times, 5 January 2021
Read more at The Straits Times
RiskScreen: Eliminating Financial Crime with Smart Technology
Advance your CPD minutes for this content, by signing up and using the CPD WalletFREE CPD Wallet