Singapore’s central bank proposes new regulations for Bitcoin startups

Rage Review : The Central Bank of Singapore has proposed a new regulatory framework for payment providers, requiring applicant companies to obtain a license from the Monetary Authority of Singapore (MAS) so that they can regulate digital currency exchanges. MAS also proposed the creation of a "National Payments Committee" to guide policies and coordinate with industry stakeholders. The potential advantages of a distributed ledger system include: faster processing and improved efficiency; reduced operating costs; and better resilience against failures in the system.

Translation: Nicole

Singapore’s central bank has proposed a new regulatory framework for payment providers, a move that could allow it to oversee digital currency exchanges.

The regulatory framework requires applicant companies to obtain a license from the Monetary Authority of Singapore (MAS) and divides payment activities into several different sectors. Digital currency exchanges will be regulated by regulations for startups that provide "funds transfer and exchange services."

MAS said:

“The scope of money exchange activities is likely to encompass currency exchange operations. In addition, it is likely that intermediaries that buy, sell or facilitate the exchange of virtual currencies such as Bitcoin will also be considered money transfer and exchange services under the proposed payment framework.”

The body outlined the need for a “flexible” payments regulatory architecture, reflecting the changing face of the financial industry following a period of technological upheaval.

However, any trading service in Singapore under MAS regulation is not a foregone conclusion. The comment period for the proposal runs until Oct. 31, during which the agency is also seeking feedback on whether a new regulatory framework should be proposed.

If the regulatory framework comes into effect, Singapore-based bitcoin exchanges such as CoinHako, Coinbase and Quoine are likely to be affected.

Create a committee

MAS also proposed the creation of a "National Payments Council" that could steer policy and coordinate with industry stakeholders. Its members would come from Singapore's public and private sectors, the agency said.

The proposal comes a year after MAS announced it had begun raising funds to explore applications for blockchain technology.

Last July, the agency announced funding for blockchain-based record-keeping experiments, part of a $225 million fund to invest in financial technology experiments.

Ravi Menon

At that time Managing Director Ravi Menon said:

“Potential benefits of distributed ledger systems include faster and more efficient processing, lower operating costs, and greater resilience against failures in the system.”