Singapore’s MAS Sets the Record Straight on Crypto Sandbox Misconceptions

The Monetary Authority of Singapore (MAS) has clarified its stance on cryptocurrencies and its regulatory framework. The letter, titled “Singapore treads uneasily in crypto sandbox,” raised concerns about Singapore’s approach to cryptocurrency regulation. MAS Director (Corporate Communications) Dawn Chew addressed these concerns, asserting that the article conflated several unrelated issues and provided a more accurate picture of the country’s position.

No “Crypto Sandbox”

The first point of clarification made by MAS is that there is no “crypto sandbox” in Singapore. Instead, Singapore offers the FinTech Regulatory Sandbox, introduced in 2016, which supports a wide range of financial technology experimentation. Crucially, none of the businesses that have qualified for this sandbox thus far facilitate cryptocurrency payments.

FAST Interbank Payment System Misunderstanding

MAS also addressed the misunderstanding regarding the connection between retail bank deposits and cryptocurrency payments. The article mentioned concerns that MAS is linking retail bank deposits to crypto payments by allowing cryptocurrency companies access to Singapore’s FAST interbank payment system. However, it was clarified that any individual or company, including cryptocurrency firms, can use FAST as long as they have a bank account. Importantly, payments made through FAST are in fiat currencies, not cryptocurrencies. This means that payment transactions between a customer and a cryptocurrency company using FAST do not mean the customer’s bank deposits are linked to that company.

Unrelated Malware Scam Cases

The recent malware scam cases mentioned in the article were highlighted as having nothing to do with cryptocurrencies. These scams involved fraudsters taking control of customers’ mobile devices and conducting unauthorized transfers through the banking system in fiat currencies. Therefore, these incidents should not be conflated with the cryptocurrency industry.

Stringent Regulatory Measures

MAS acknowledged the risks associated with cryptocurrencies, including money laundering and risks to retail customers. To mitigate these risks, MAS grants licenses to cryptocurrency players only if they have robust anti-money laundering (AML) controls in place, and most applicants have not been successful. Additionally, MAS has consulted the public on a suite of regulatory measures aimed at addressing the risks posed by cryptocurrencies to retail customers.

These measures are set to be progressively implemented by the end of this year. As a result, Singapore is poised to establish one of the strictest regulatory regimes in the world governing retail access to cryptocurrencies.

In conclusion, MAS Director Dawn Chew’s response provides much-needed clarity on Singapore’s approach to cryptocurrencies and its regulatory efforts. The country’s focus on stringent measures to combat money laundering and protect retail customers demonstrates its commitment to responsible cryptocurrency regulation.

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