Singapore Imposes New Rules for Digital Payment Token Services

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Paxos to issue USD stablecoin in Singapore, wins initial approval

November 16, 2023 Coin Telegraph

The USD-backed token will comply with Singapore’s upcoming stablecoin laws and be issued through a new local Paxos entity that’s received initial approval.

Crypto infrastructure firm Paxos has secured in-principle approval from Singapore’s regulator for a new entity that’s planning the launch of a U.S. dollar-backed stablecoin.

In a Nov. 15 statement, Paxos said it received an initial nod from the Monetary Authority of Singapore (MAS) for its new entity Paxos Digital Singapore Pte. Ltd. The new firm can offer digital payment token services and plans to issue a USD stablecoin cleared under the MAS’ proposed stablecoin regulations.

Upon receiving full approval, Paxos said it will be able to partner with enterprise clients to issue the stablecoin in Singapore.

“Global demand for the U.S. dollar has never been stronger, yet it remains difficult for consumers outside the U.S. to get dollars safely, reliably and under regulatory protections,” said Paxos head of strategy Walter Hessert. “This in-principle approval from the MAS will allow Paxos to bring its regulated platform to more users around the world.”

On Aug .15, MAS announced its final framework for regulating stablecoins aimed at non-bank issued tokens pegged to the value of the Singapore dollar or G10 currencies such as the euro, British pound and U.S. dollar and whose circulation exceeds 5 million Singapore dollars ($3.7 million).

@MAS_sg has announced the features of a new regulatory framework that seeks to ensure a high degree of value stability for #stablecoins regulated in #Singapore. https://t.co/j12QambGIJ pic.twitter.com/LBUoOGY16P
— MAS (@MAS_sg) August 15, 2023

On Aug. 7, PayPal launched its USD-backed stablecoin — PYUSD — issued by Paxos.

Paxos formerly minted Binance’s now-defunct BUSD stablecoin but was ordered by the New York Department of Financial Services to cease issuance of the token after the agency declared the stablecoin an unregistered security.

Paxos clarified that all of its stablecoins are fully backed by the U.S. dollar and cash equivalents, adding that it issues monthly attestations and reserve reports to ensure compliance.

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South Korean exchange Upbit gets initial license nod from Singapore

October 16, 2023 Coin Telegraph

Central Bank

Upbit Singapore scored initial approval from the country’s central bank and financial regulator for a local crypto license.

The Singapore entity for Upbit, South Korea’s largest exchange by volume, has been given in-principal approval for a Major Payment Institution (MPI) license in Singapore.

On Oct. 16, Upbit Singapore said the Monetary Authority of Singapore (MAS) gave the in-principle license nod, allowing it to continue with digital payment token services to institutional investors while awaiting its full license.

Upbit Singapore founder and CEO Alex Kim said in a statement that the firm was founded in 2018 but called the recent approval a strategic milestone for it to deepen its local presence.

*The Upbit Singapore team, pictured in the city’s downtown area. Source: Upbit Singapore*

Azman Hamid, the firm’s compliance chief, said the approval reflects its commitment to building its businesses in Singapore. “We will contribute to further establish Singapore as the leading hub for the next generation of financial businesses,” he added.

A potential full approval for Upbit would see the exchange join a total of 15 crypto firms with full MPI digital payment token serve licenses from MAS.

In October alone, the Singaporean entities for Coinbase, Ripple and Sygnum Bank all received license approvals from MAS — pushing the number of MAS-licensed digital payment token service firms to 15.

On Oct. 2, Coinbase received full approval for its MPI license, with crypto trading firm GSR scoring in-principal approval for its MPI the same day. Swiss crypto bank subsidiary Sygnum Singapore scored its full MPI license a day later and Ripple received its full MPI on Oct. 4.

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Ripple gets formal approval for Singapore payments license

October 4, 2023 Coin Telegraph

Central Bank

Ripple said it received its fully-fledged digital payment tokens license from the Monetary Authority of Singapore.

Ripple says it received a license to operate as a major payments institution from Singapore's central bank allowing it to continue operations in the country after receiving in-principle approval in June.

In an Oct. 4 blog post, the company said its local entity, Ripple Markets APAC Pte Ltd, was granted the full license by the Monetary Authority of Singapore (MAS).

It’s official: Ripple is now fully licensed to provide digital payment token services in Singapore by @MAS_sg! Ripple is committed to delivering real-world crypto solutions for businesses in APAC.

Learn more: https://t.co/jD8xSc2pdd
— Ripple (@Ripple) October 4, 2023

Ripple chief Brad Garlinghouse said in a statement that "Singapore has developed into one of the leading fintech and digital asset hubs striking the balance between innovation, consumer protection and responsible growth.”

Garlinghouse said Singapore was home to the firms Asia Pacific headquarters since 2017 and the country "has been pivotal to Ripple’s global business."

The license allows Ripple to provide digital payment token services. It joins a list of 14 others given the same license by MAS including the local arms of crypto exchanges Coinbase, Independent Reserve and Blockchain.com.

3AC Co-Founder Zhu Su Arrested at Airport, Receives Four Month Jail Sentence for Contempt of Court: Report

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3AC Founders Kyle Davies and Zhu Su Slapped With Nine-Year Ban by Singapore Regulator a Month After Dubai Fines

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3AC

Three Arrows Capital founders Kyle Davies and Zhu Su are barred from regulated activities or acting as top execs at any financial firm in Singapore.

Singapore's central bank has issued nine-year prohibition orders to Kyle Davies and Zhu Su over alleged violations of the country's securities laws at their co-founded crypto hedge fund Three Arrows Capital (3AC).

In a Sept. 14 statement, the Monetary Authority of Singapore (MAS) said Su and Davies will be banned from regulated activities during the prohibition period that started Sept. 13.

They also won't be permitted to manage, act as a director, or be a substantial shareholder of any capital market services business in Singapore.

In its decision to bar the pair, MAS said it found further securities law violations when it undertook further investigations into the bankrupt 3AC and its co-founders.

MAS claimed Su and Davies failed to notify the central bank that 3AC employed a new business representative, gave false information to the regulator, and failed to have an appropriate risk management framework in place.

Loo Siew Yee, MAS' assistant managing director of policy, payments and financial crime said “MAS takes a serious view of Mr Zhu’s and Mr Davies’ flagrant disregard of MAS’ regulatory requirements and dereliction of their directors’ duties."

"MAS will take action to weed out senior managers who commit such misconduct” she added.

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Singapore central bank says three business days is ‘timely transfer’ for stablecoins

August 15, 2023 Coin Telegraph

Coin Telegraph

Redemptions of MAS-regulated single-currency stablecoins will have a longer grace period which is five business days despite some arguing that it should be done in real-time.

While blockchains continue to revolutionize payments by allowing instant transfers, Singapore’s central bank believes that three business days is a "timely transfer" for single-currency stablecoins (SCS), which is similar to transfer speed requirements for domestic money transfers.

On Aug. 15, the Monetary Authority of Singapore (MAS) released its regulatory framework for stablecoins in the city-state. In the newly-published guidelines, the financial regulator highlighted that it would consider three business days as a timely transfer for SCS despite some feedback calling for a shorter time frame.

*Screenshot of MAS’ response to the public consultation on stablecoins. Source: MAS*

According to MAS, while SCS transfers may be expected to be completed more quickly because they are done on a blockchain, transfers of MAS-regulated stablecoins may “occur on various types of blockchain infrastructure that may have different service standards.” The central bank wrote that these types of blockchain infrastructures may not always be under the control of intermediaries. MAS wrote:

“MAS will retain the proposed timeline of three business days. This would mirror the existing money transmission requirement for domestic money transfer services.”

Apart from stablecoin transfers, MAS also indicated that SCS redemptions need a longer time period. According to the document, redeeming stablecoins back to fiat will be given five business days. This response from MAS came despite some respondents arguing that redemptions must be done "within a shorter time frame, or even on a real-time basis."

According to MAS, it will proceed with the requirement that issuers return the value of MAS-regulated SCS to holders within five business days. The regulator explained:

“The redemption timeline is intended to strike a balance between responsiveness to users’ requests and ensuring there is enough time for the SCS issuer to do so in an orderly manner under various stress situations.”

Cointelegraph reached out to MAS for comment but did not get an immediate response.

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Singapore central bank releases regulatory framework for stablecoins

August 15, 2023 Coin Telegraph

Coin Telegraph

The framework outlines requirements for stablecoin issuers to meet to be deemed as regulated by the Monetary Authority of Singapore.

Singapore's central bank has released a revised regulatory framework aimed at ensuring stability for single-currency stablecoins regulated in the city-state.

The Monetary Authority of Singapore announced the framework on Aug. 15 and said it will police single-currency stablecoins (SCS) pegged to the value of the Singapore dollar or G10 currencies such as the euro, British pound and United States dollar.

*Excerpt from statement regarding its stablecoin regulatory framework. Source: MAS*

“MAS’ stablecoin regulatory framework aims to facilitate the use of stablecoins as a credible digital medium of exchange, and as a bridge between the fiat and digital asset ecosystems," said the bank's deputy managing director of financial supervision Ho Hern Shin.

"We encourage SCS issuers who would like their stablecoins recognized as 'MAS regulated stablecoins' to make early preparations for compliance,” Shin added.

The framework outlines several requirements that stablecoin issuers would have to adhere to, including timely redemptions and robust reserve management, among others:

Value stability: Reserve assets will be subject to requirements relating to their composition, valuation, custody and audit, to give a high degree of assurance of value stability.
Capital: Stablecoin issuers must maintain minimum base capital and liquid assets to reduce the risk of insolvency and enable an orderly wind-down of business if necessary.
Redemption at Par: Issuers must return the par value of the stablecoins to holders within five business days from a redemption request.
Disclosure: Issuers must provide appropriate disclosures to users, including information on the SCS’ value stabilizing mechanism, rights of SCS holders, as well as the audit results of reserve assets.

MAS noted only stablecoin issuers that fulfill the requirements under the framework will be able to apply to become MAS-regulated.

"This label will enable users to readily distinguish MAS-regulated stablecoins from other digital payment tokens, including 'stablecoins' which are not subject to MAS’ stablecoin regulatory framework," it said.

It also warns any person that represents a token as being MAS-ceritified would be subject to penalties set out in the new framework, along with being added to an alert list.

The revised regulatory framework accounts for feedback from an October 2022 public consultation.

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This is a developing story, and further information will be added as it becomes available.

MAS

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