Key takeaways:
- The MAS has approved no companies participating in its FinTech Regulatory Sandbox framework as crypto payment providers.
- The letter criticized Singapore for “unwisely” granting cryptocurrency businesses access to the FAST interbank payment system.
No companies have been approved by the Monetary Authority of Singapore (MAS) to participate in its FinTech Regulatory Sandbox framework as crypto payment providers.
The MAS clarified that Singapore does not have a “crypto sandbox” but rather a sandbox that supports a wide range of fintech experimentation in response to a letter that was published in the Financial Times and criticized the Singaporean government for lacking public consultation and oversight on the adoption of cryptocurrencies.
The letter criticized Singapore for “unwisely” granting access to the Fast and Secure Transfers (FAST) interbank payment system to cryptocurrency businesses. Customers of participating entities can send money between participating entities in Singapore using the electronic funds transfer system.
The MAS stressed, however, that all companies with a legitimate bank account, including crypto enterprises, can access the FAST system, saying:
“Payments through FAST are in fiat currencies, not cryptocurrencies.”
The regulator continued by asserting that there was no connection between the rising malware scam instances in Singapore and cryptocurrencies and that, instead, such scams were more common in the fiat economy:
“These scams entail fraudsters taking control of customers’ mobile devices and effecting unauthorized transfers through the banking system in fiat currencies.”
Singapore grants operational licenses to cryptocurrency businesses that can demonstrate effective anti-money laundering (AML) measures as part of its fight against the practice. They further added:
“As these measures are progressively implemented from the end of this year onwards, Singapore will have one of the strictest regulatory regimes in the world governing retail access to cryptocurrencies.”
Regarding this, the MAS recently held a public consultation on several regulatory proposals to reduce the risks that cryptocurrencies represent to retail customers. Singapore’s presidential election was won by former MAS Chair Tharman Shanmugaratnam, who in the past has viewed cryptocurrencies as risky investments.
According to reports, the president-elect warned Singapore-based users as MAS head that cryptocurrencies were “highly volatile” and “highly risky as investment products” in 2021.
