The Deputy Prime Minister of Singapore has sought to clarify the nation’s stance on cryptocurrencies with regards to its money laundering laws. Speaking earlier this week, Mr. Tharman Shanmugaratnam emphasized that Singapore’s financial regulator will not distinguish between cryptocurrencies and fiat currencies.
Singapore’s Deputy Prime Minister Updates Stance on Cryptocurrencies
With Singapore increasingly being seen as a potential destination for cryptocurrency, companies seeking to flee the regulatory uncertainty presently associated with China, Singaporean officials are facing increased scrutiny regarding the nation’s juridical apparatus pertaining to cryptocurrencies.
Earlier this week, Singapore’s deputy prime minister and Chairman of the Monetary Authority of Singapore (MAS), Mr. Tharman Shanmugaratnam, sought to clarifySingapore’s anti-money laundering (AML) and countering the financing of terrorism laws (CFT) with regards to cryptocurrency. “When it comes to money laundering or terrorism financing, Singapore’s laws do not make any distinction between transactions effected using fiat currency, virtual currency or other novel ways of transmitting value.”
Mr. Shanmugaratnam emphasized that the MAS, Singapore’s financial regulator and central bank, will not distinguish between transactions conducted in fiat and cryptocurrency in seeking to enforce its AML/CTF laws, adding that all financial institutions will be subject to the same regulations. The MAS chairman also stated that The Commercial Affairs Department will be empowered to investigate and prosecute cases relating to money laundering or terrorist financing.
Unique Challenges Posed by Virtual Currencies
The MAS chairman, however, recognized that the regulation of virtual currency transactions may pose challenges not associated with monitoring fiat currency circulations.
Mr. Shanmugaratnam emphasized the pseudo-anonymous qualities of cryptocurrency, adding that the absence of a centralized clearing further complicates the challenge of regulating transactions executed using virtual currencies.
In order to mitigate said challenges, the MAS will seek to impose anti-money laundering and anti-terrorist financing requirements on intermediaries that exchange fiat for virtual currencies – such as exchanges and brokers. Singapore’s financial regulator is presently conducting public consultation relating to the proposed Payment Services Bill intended to empower MAS to have greater jurisdiction over cryptocurrency exchanges and brokerages.
Mr. Shanmugaratnam’s comments comprise an apparent change in the position of the MAS with regards to the cryptocurrencies, as the MAS chairman has previously stated that the MAS will not seek to regulate virtual currencies, except for when the activities relating to cryptocurrencies directly fall under the juridical purview of the MAS. By contrast, Mr. Shanmugaratnam’s recent statement illustrates that the MAS is seeking to expand its regulatory mandate to greater monitor businesses that convert fiat into cryptocurrencies.