The Financial Institutions (Miscellaneous Amendments) Bill, currently under deliberation in the Singapore Parliament, is set to grant the Monetary Authority of Singapore (MAS) expanded jurisdiction. Should this legislative proposal be endorsed, it could substantially impact crypto entities conducting business within this jurisdiction.
An essential component of the proposed revisions is the extension of the regulatory jurisdiction vested in the MAS. The measure seeks to grant the MAS the power to issue directives to entities holding capital markets services licenses (CMSL holders) and engaging in unregulated commercial activities.
Furthermore, the move to address the challenges posed by the dynamic cryptocurrency market corresponds with the transformation of the financial markets environment, which the MAS has the authority to oversee. In addition, the regulatory framework aims to confer greater authority to the MAS to ensure capital markets’ integrity and stability.
Singapore is determined to uphold a resilient and flexible regulatory framework capable of efficiently addressing the intricacies of nascent financial technologies like cryptocurrency and blockchain.
Shielding CMSL Holders
According to the regulations outlined in the bill, CMSL holders may be subject to high risks. The law highlights instances where such risks may arise. Such instances include Bitcoin (BTC) futures and certain payment token derivatives traded on overseas platforms.
The financial watchdog is preparing to increase its regulatory powers to respond to the continuously changing conditions of the cryptocurrency markets. The proposed bill emphasizes the MAS’s growing role in outlining the essential minimum requirements and protections if CMSL holders and their representatives engage in unregulated economic activity.
This legislative move sharpens the commitment to tighten risk-mitigating measures, notably in the context of retail investor activity. It is worth noting that these regulatory procedures apply to cryptocurrency exchanges, which are considered CMSL holders and licensees of Major Payment Institutions (MPI).
International Collaboration And Commitment
In November 2023, the MAS took preemptive steps to reduce speculation in cryptocurrency investments. The regulatory body implemented several restrictions to encourage a sensible investment environment.
Furthermore, the regulatory framework for stablecoins was revised last August. Following these regulatory changes, Circle and Ripple were granted Major Payment Institution (MPI) licenses, bringing the total number of license holders to over a dozen trustworthy businesses.
Last November, Paxos also received approval to launch a US dollar stablecoin. Meanwhile, the MAS is aggressively pursuing tokenization through Project Guardian, demonstrating a commitment to exploring transformational technologies in the financial sector.
The proposed measure includes additional features aimed at improving MAS’s regulatory capacities. Furthermore, the bill expands MAS’s power to seek court orders to seize evidence, strengthening the regulatory body’s ability to enforce compliance.
Notably, the bill allows the agency to approve agents assigned by foreign authorities to inspect Singaporean financial institutions. This international collaboration demonstrates MAS’s commitment to maintaining a globally consistent regulatory framework and encouraging cross-border cooperation.
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