Singapore announces two key fintech regulatory initiatives re digital assets and payments
Crypto Code of Practice strengthens regulatory compliance for the digital asset industry
New Code of Practice and Guide
Facilitated by the Monetary Authority of Singapore (MAS), the Association of Cryptocurrency Enterprises and Start-ups, Singapore (ACCESS) has developed a Code of Practice under its Standardisation of Practice In Crypto Entities (SPICE) initiative, together with an accompanying Guide in partnership with Linklaters and in consultation with the Association of Banks in Singapore. The Code of Practice aims to enable cryptocurrency firms to open bank accounts in Singapore and establish best practices to strengthen regulatory compliance for digital asset companies.
Tackling money laundering and terrorist financing risk
The Code of Practice addresses concerns regarding the use of cryptocurrencies to facilitate money laundering and terrorism-financing activities due to the anonymity associated with the products, and promotes best practices to strengthen regulatory compliance for digital asset companies.
Complementing Singapore’s Payment Services Act 2019, SPICE provides detailed Anti-Money Laundering and Countering the Financing of Terrorism guidelines and practical guidance which crypto-asset and blockchain companies should comply with, including Know-Your-Customer (KYC) best practices, transaction monitoring, customer screening, correspondent services and crypto value transfers, which are relevant to players in the digital asset industry.
Partnership with Linklaters
Linklaters has been appointed as the law firm driving this inaugural industry-changing initiative from a legal and strategic perspective. The leader of our financial regulation practice in Singapore, Peiying Chua commented:
“This initiative will enhance the conduct of crypto-asset and blockchain companies in Singapore and further cement Singapore’s reputation as a leading jurisdiction in the blockchain and fintech space.”
Mr. Anson Zeall, Chairman at ACCESS, pointed to recent developments in Singapore’s crypto regulatory regime, suggesting that it is becoming more competitive at the international level. He noted that newly-proposed changes to the country's goods and services tax (GST) in relation to digital payment tokens will help to lower hurdles and reduce expenses and costs for businesses in the emerging sector, commenting:
“We are heartened to witness the industry moving in the right direction with key developments that support the growth momentum.”
Payments Regulatory Evaluation Program goes into pilot
What is the purpose of the PREP?
Linklaters, along with other six local and international firms, has been invited by the MAS to participate in a two-month pilot run of the newly launched Payments Regulatory Evaluation Programme (PREP), jointly developed by the MAS and the Singapore Academy of Law. Pursuant to recent feedback, the program has subsequently been opened to other law firms in Singapore.
With the upcoming commencement of the Payment Services Act, PREP aims to help the payments industry streamline the process to gain access to legal service providers specialising in payment services regulations to meet the new compliance standards.
What does the pilot offer payment firms?
Under the pilot programme, payment firms will have easy access to a list of participating law firms with such specialised lawyers for comprehensive and customised regulatory assessment applicable to their payments business to meet their compliance needs.
The programme will officially launch at the Singapore FinTech Festival in November 2019.
Linklaters a key participant
Linklaters’ fintech team has been an active market participant in Singapore, advising established financial institutions and corporates, as well as other participants in the fintech ecosystem, including the government and regulators, industry associations and emerging players on a broad range of legal and regulatory matters.
In taking part in this pilot programme Linklaters will continue its work in supporting and shaping the legal and regulatory framework on the payments industry. With the upcoming Payment Services Act, we look forward to continuing to support our clients in navigating the increasingly complex and fast-changing fintech landscape.