The Monetary Authority of Singapore (MAS) under the leadership of Managing Director Ravi Menon — who has been in charge for 8 years and recently got his stint extended for another two years in May — is eyeing support for the city-state’s financial sector growth by issuing digital bank licenses for the first time.
Interested entities have until December 31 to submit their applications, with MAS expected to announce the successful applicants in mid-2020.
New legislation set to come into force in January 2020, known as the Payments Services Act, will become the first set of laws to regulate “entities that provide digital payment tokens, merchant acquisition and domestic money transfer services” in Singapore.
According to a report by news agency Future of Fintech, the Act it took 2 years for the authority to carefully draft the bill that will apply to 200 additional payments entities in a bid to protect customers’ funds.
Having studied payments regulation in places such as the UK, Canada, Hong Kong and Australia, the MAS assured that its payments services act is “quite cutting edge in terms of the breadth of its coverage”.
According to Menon, cryptocurrencies have “taken on a life of [their] own,” with speculation around the assets presenting risks, but the MAS does not plan to impose any bans on the digital tokens. “There is no purpose in trying to ban cryptocurrencies,” he said.
The managing director also said he believes blockchain technology is well-suited for services that involve cross-border remittance and verification of trade finance invoicing, as well as for performing customer checks digitally. “We don’t regulate the technology, we regulate the use-cases,” he added.
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