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Singapore’s Token Regulation: A Comprehensive Guide

Singapore has established itself as a global leader in the cryptocurrency space, with a robust regulatory framework to govern digital payment tokens (DPTs). The city-state has introduced three types of licenses for DPT service providers, categorized based on risk and transaction volume.

License Categories

The Monetary Authority of Singapore (MAS) issues three types of licenses:

  • Money-Changing License: Limited services with a narrow scope, suitable for small businesses.
  • Standard Payment Institution (SPI) License: Offers flexibility for smaller businesses, providing most services but staying below specific transaction thresholds.
  • Major Payment Institution (MPI) License: Handles large transactions, subject to stricter regulations due to higher risks.

Who is Affected?

The new regulations directly affect:

  • DPT service providers: exchanges, buying and selling of DPTs, transferring, custodian wallets, and brokering.
  • Individuals and businesses using DPTs: those using crypto as payment or exceeding specific transaction limits may face regulations.

Indirectly affected are financial institutions, technology providers, investors, and the public. Understanding Singapore’s crypto regulations is crucial for informed investment decisions and navigating the crypto landscape safely.

Key Regulations

Singapore’s crypto regulation is governed by three key acts:

  • Payment Services Act (PSA): The cornerstone of Singapore’s crypto regulation, governing DPT activities.
  • Securities and Futures Act (SFA): Regulates specific DPTs with features akin to capital market products.
  • Commodity Trading Act: Applies to trading activities involving asset-backed DPTs.

Conclusion

Singapore’s regulatory framework provides a unique balance between innovation and compliance. However, navigating these regulations can be complex for financial companies entering the space. KYC Hub’s AI-powered crypto compliance solutions help Singaporean financial institutions stay compliant with AML/CTF regulations, offloading compliance burdens and strengthening operations.

Read More:

  • UK Crypto Regulations
  • Cryptocurrency Regulations in India
  • Stages of Money Laundering
  • Financial Crime
  • Enhanced Due Diligence
  • AML Transaction Monitoring