In the Republic of Singapore, the main financial regulator MAS has recently stated that it will be controlling payments, in which payment tokens are used as underlying assets. Also, payment tokens in the approved exchanges will be regulated in Singapore.
We will now discuss how Singapore regulates its derivatives market and how this supervision affects investors and businessmen who are planning to register a cryptocurrency company there.
For MAS having control over regulated exchanges and digital tokens offered there is crucial. That is why cryptocurrency derivatives are not traded on exchanges approved by MAS (for ex. foreign exchanges). While MAS does not regulate processing derivative transactions in Singapore, it does not prohibit them either.
Tokenization of payments
The payment token digitally represents certain value and must fulfill the following conditions:
- Can be electronically sold, stored, and transferred
- Must be expressed in measurable units
- Should not have a fixed value stated by the issuer
- Can potentially be used for paying for goods and services or repaying debt.
Registration of a cryptocurrency company in Singapore
MAS has repeatedly stated that most of retail investors do not view cryptocurrency derivatives as suitable for them. In the future, maybe even soon, the financial regulator is expected to start applying the measures below:
- Recommending retail investors not to get involved with the non-regulated organization and in their activity. Otherwise, MAS would not be able to guarantee regulatory protection.
- On the exchanges regulated by MAS more penalties will be introduced on individuals or companies who invest in token derivatives.
- MoneySENSE and other platforms will be used even more for educating consumers and investors to inform them about possible risks in the trade of payment tokens or unregulated organizations.
Crypto assets regulation in Singapore
As stated by MAS in their announcement, the regulator will not demand a minimum amount for investors engaged with derivatives as payment tokens. Proposals from earlier that argued to make trading activities on a prepay basis obligatory for investors or to forbid them from trading similar products, were vainly severe.
As some products are not approved by MAS, the regulator is not planning on publishing a list approved cryptocurrency derivatives. So, stakeholders will decide on their own if the deal they are engaged in is complying with the regulations.
Measures mentioned earlier will be monitored by MAS in order to check their effectiveness. These measures were also suggested by the parties who work with consultations. It is expected from MAS to issue a response on the feedback on regulating the use of electronic money and digital payment tokens.
For everyone who is new to the Asian market but wants to know how the crypto market is regulated there, COREDO will prepare answers and advice. We can also provide our services for individuals planning to open a cryptocurrency company in Singapore.