Singapore is aiming to boost cryptocurrency firms by offering them a chance to apply for operating licenses. The move, called the Payment Services Act, will allow global cryptocurrency firms the chance to expand their operations. It will also move Singapore into a more competitive space with Japan, which has seen 22 cryptocurrency licenses since 2017.
After the Payment Services Act goes into effect on Thursday (Jan. 30), it will serve as detailed regulation for cryptocurrency firms — for activities ranging from digital payments to the trading of coins like bitcoin and ether. It will also help provide a concrete and detailed framework on things like eWallets and exchanges of cryptocurrencies.
The increased interest and activity in cryptocurrency circles have been a double-edged sword, casting more light on the ways cryptocurrency can be used for illicit things. The legislation will let the Monetary Authority of Singapore (MAS) act in a supervisory manner on issues like cybersecurity, and allow controls on money laundering and terrorism financing.
Among the firms gearing up to apply for licenses are Tokyo-based Liquid Group, Inc. and London-based Luno. Both already operate in Singapore. Liquid is planning to apply by way of its local subsidiary, Quoine.
The Asia-Pacific region is home to 20 of the top 50 crypto exchanges. Last year, about 40 percent of bitcoin exchanges stemmed from that area, according to data from Chainalysis.
Binance Holdings, one of the world’s largest crypto exchanges, has an office in Singapore, though the company declined to say whether it would be seeking a license. Binance is backed by Vertex Venture Holdings, the venture capital arm of Singaporean firm Temasek Holdings.
Singapore has been attempting to modernize its banking as of late, with another announcement that it would be offering digital banking licenses. This prompted a wave of applications from notable businesses and firms in the area.