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MAS proposes regulation of digital currency services under Payment Services Bill, launches consultation

The Monetary Authority of Singapore (MAS) has launched a second consultation on its proposed payments regulatory framework, known as the Payment Services Bill, which aims to bring the regulation of payment services under a single legislation.

Among other things, the bill will expand the scope of regulated payment activities to include services relating to virtual currency, such as bitcoin and Ethereum, and other innovations. Importantly, it will differentiate regulatory requirements on the basis of the risks posed by specific payment activities, instead of applying a uniform set of regulations on all payment service providers.

“The new framework will expand the scope of regulation to include domestic money transfers, merchant acquisition, and the purchase and sale of virtual currencies”, the MAS said in its official release.

According to the consultation paper, the MAS said that it will introduce AML/CFT requirements to be imposed on virtual currency intermediaries that deal in or facilitate the exchange of virtual currencies for real currencies. It said:

“Virtual currency exchanges that meet the funds possession criteria will need to hold a payment services licence. These include exchanges that originate from initial coin offerings (“ICOs”), where the ICO issuer provides virtual currency services.”

Furthermore, the MAS has proposed to exclude types of virtual currency that are limited in user reach and scope of use as such services pose less of a risk than widely used virtual currency such as Bitcoin and Ether.

“Any activity that processes such limited purpose virtual currency will thus not be regulated in the Bill,” it said.


With regard to virtual currencies, the MAS is seeking comments on:

  • Whether the definitions of e-money and virtual currency accord with industry understanding of these terms
  • Whether the scope of virtual currency services is suitable given the MAS’ primary regulatory concern in the bill is that virtual currencies may be abused for ML/TF purposes.
  • Whether proposed exclusion covers most types of virtual currency that are limited in user reach.

The public consultation will run until 8 January 2018.

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