The central bank of Singapore has proposed a new regulatory framework for payments providers in the city-state, a move that would bring digital currency exchanges under its oversight.
The proposed framework would require applicable companies to obtain a license from the Monetary Authority of Singapore (MAS), and divides payment activities into several categories. Digital currency exchanges would be covered by a provision overseeing startups that provide “money transmissions and conversion services”.
The MAS said:
“The scope of currency conversion activities is intended to encompass the business of exchanging of currencies at a rate of exchange. In addition, it is likely that under the [Proposed Payments Framework], virtual currency intermediaries which buy, sell, or facilitate the exchange of virtual currencies, such as bitcoin, will also be considered to undertake [money transmissions and conversion services].”
The institution outlined the need for a “flexible” regulatory framework for payments, one that reflects the changing face of finance amidst a period of technology upheaval.
That any exchange services within Singapore might be brought under the oversight of the MAS isn’t a foregone conclusion, however. A comment period for the proposal runs through 31st October, and as part of the comment period, the agency is seeking feedback on whether the move should be undertaken.
Bitcoin exchanges operating in the country, like CoinHako, Coinbase and Quoine would likely be impacted should the framework come into effect.
Council creation
The MAS also proposed creating a “National Payments Council” that would steer policy and coordinate with industry stakeholders. Its membership, the institution said, would be drawn from both the public and private sectors in Singapore.
The proposal comes just over a year after the MAS announced that it had begun allocating funding to explore applications of the technology.
Last July, the institution announced that it was providing funds for a blockchain-based recordkeeping trial as part of a broader $225m package devoted to financial technology experimentation.
“The potential benefits of such a distributed ledger system include: faster and more efficient processing; lower cost of operation; and greater resilience against system failure,” managing director Ravi Menon said at the time.
The full proposal can be found below:
Proposed Activity Based Payments Framework and Establishment of a National Payments Council
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