2024

Cryptocurrency

Token

April

<p>The post <a href="https://coinpedia.org/cryptocurrency-regulation/cryptocurrency-regulations-in-singapore/" rel="noopener noreferrer nofollow">Crypto Regulations in Singapore 2024</a> appeared first on <a href="https://coinpedia.org" rel="noopener noreferrer nofollow">Coinpedia Fintech News</a></p>
<p>Singapore, as a country, has a high adoption rate of 11.05% owing to the tech-savviness of the population there. The pro-crypto stance upheld by Singapore is supporting the growth of cryptocurrency in the region. Singapore has been one of the early adopters of cryptocurrencies, thus the environment here is crypto-friendly with basic regulations in place.&nbsp;&nbsp;</p>
<h2 class="wp-block-heading" id="h-executive-summary"><strong>Executive Summary</strong></h2>
<p>Cryptocurrency is not a legal tender in Singapore, however it can be used as an alternative means of payment. This means, crypto is not officially recognized currency in Singapore. Cryptocurrency is legal in Singapore and the regulations around <a href="https://markets.coinpedia.org/bitcoin/" rel="noopener noreferrer nofollow">Bitcoin</a> and other assets are very clear. The Anti-money laundering laws and counter-terrorism financing laws in Singapore are very strict. The <a href="https://www.mas.gov.sg/-/media/MAS-Media-Library/regulation/faqs/PD/faqs-on-payment-services-act-2019/Payment-Services-Act-FAQ--7-March-2022.pdf" rel="noopener noreferrer nofollow">Payment Services Act</a> (PSA) was passed in 2019 with the goal of clarifying the legal stature of cryptocurrencies.&nbsp;</p>
<p>Let us uncover the details about how PSA of Singapore governs these digital assets in 2024.</p>
<h2 class="wp-block-heading" id="h-singapore-s-crypto-policy"><strong>Singapore’s Crypto Policy</strong></h2>
<p>The Payment Services Act (PSA) 2019 established a regulatory framework for Digital Payment Token (DPT) service providers in Singapore. The main law regulating crypto businesses in the PSA introduced in 2019 to provide a clear set of regulations for licensing cryptocurrency.</p>
<p>The Monetary Authority of Singapore (MAS) is working day in and day out to improve the regulatory framework of DPT services in Singapore. There have been certain clarifications on regulatory requirements for crypto businesses like:</p>
<ul>
 <li>The person who carries a business in the crypto realm should obtain a license to operate.</li>
 <li>The requirements for the license applicants come under the <a href="https://www.mas.gov.sg/regulation/acts/securities-and-futures-act" rel="noopener noreferrer nofollow">Securities and Futures Act</a> (SFA).&nbsp;</li>
 <li>PSA gives MAS the authority to monitor the crypto activities taking place in Singapore.</li>
 <li>There are three licenses that DPT service providers may apply for, a money changer license for those who provide only money-changing services , a standard payment institution license for the ones with average monthly transactions of under three million dollars or five million dollars in digital currency per day,&nbsp; and a major payment institution license for the ones with higher average monthly transactions.&nbsp;</li>
 <li>An applicant of the license should have a “meaningful presence” in Singapore, must comply with the “crypto Travel Rule” by FATF, and comply with all AML/ CFT requirements to obtain the license.</li>
</ul>
<h2 class="wp-block-heading" id="h-taxation"><strong>Taxation</strong></h2>
<ul>
 <li>Singapore has no capital gains tax or income tax on crypto for individual investors. One might pay 8% goods and services tax when you buy, sell and trade crypto that are not officially labeled as DPTs.</li>
</ul>
<ul>
 <li>Crypto profit from professional trading and other business activity is subject to taxation by being treated as regular income for tax purposes.</li>
</ul>
<ul>
 <li>If one trades crypto as business or earns crypto in exchange for goods and services, income tax is levied. Taxes range between 0-22% for residents and 15% flat on employment income and 22% on other income for non-residents.Singapore is crypto friendly as it has no capital gains tax.&nbsp;</li>
</ul>
<ul>
 <li>Singapore has a 17% income tax rate. One had to pay tax at a rate of 17% if your business or profession involves trading bitcoin for profit. Additionally, payments can be made in Singapore using digital tokens like Bitcoin (or <a href="https://markets.coinpedia.org/ethereum/" rel="noopener noreferrer nofollow">Ether</a>). The usage of digital tokens as payment for products and services is tax-free even if there is a 7% tax on goods and services. Digital tokens can be used to pay for products and services tax-free.</li>
</ul>
<ul>
 <li>Miners must pay taxes on the profits they make! Usually, an individual who mines Bitcoin will be considered a hobbyist, so gains are not subject to taxation, and mining expenses are not deductible. On the contrary, if the Bitcoin miner shows a systematic effort to profit from mining activities, this may be considered a business activity and gains taxes as income accordingly. Those who generate such income from mining as a business must declare the amount as “business income” on their annual tax declarations. Companies that mine crypto and are registered with the Accounting and Corporate Regulatory Authority are also subject to corporate income tax rates.&nbsp;</li>
</ul>
<ul>
 <li>For the ones who stake and lend crypto and earn SGD 300 or more in yearly income will likely be subject to income tax on their gains. As with other forms of income tax in Singapore, individuals are responsible for declaring cryptocurrency-related taxes on their own.&nbsp;</li>
</ul>
<ul>
 <li>The <a href="https://www.iras.gov.sg/" rel="noopener noreferrer nofollow">Inland Revenue Authority of Singapore</a>(IRAS) guides crypto tax in Singapore and how to calculate income related to cryptocurrency trading activities.</li>
</ul>
<h2 class="wp-block-heading" id="h-latest-crypto-regulations-in-singapore"><strong>Latest Crypto Regulations In Singapore</strong></h2>
<p>The new measures from the MAS , applicable in 2024 include:</p>
<ul>
 <li>Identifying , mitigating and properly providing information on potential and actual conflict of interests</li>
 <li>Publishing policies, procedures and criteria that govern the listing of DPTs</li>
 <li>Establishing effective policies and procedures to handle customer complaints and resolve disputes.</li>
</ul>
<h2 class="wp-block-heading" id="h-timeline-of-regulations-in-singapore"><strong>Timeline of Regulations In Singapore</strong></h2>
<h2 class="wp-block-heading" id="h-2024">2024</h2>
<p>02 April 2024: <a href="https://www.mas.gov.sg/news/media-releases/2024/mas-expands-scope-of-regulated-payment-services" rel="noopener noreferrer nofollow">MAS Expands Scope of Regulated Payment Services</a><br>MAS introduced amendments to the Payment Services Act (PS Act) expanding regulation to include custodial services, DPT transmission, and cross-border transfers. Effective from April 4, 2024.</p>
<h2 class="wp-block-heading" id="h-2023">2023</h2>
<p><a href="https://www.mas.gov.sg/news/media-releases/2023/mas-strengthens-regulatory-measures-for-digital-payment-token-services" rel="noopener noreferrer nofollow">23 November 2023</a>: MAS published its final tranche of responses regarding DPT service providers in Singapore. The new proposal aimed to minimize the potential consumer harm and cyber risks.</p>
<p>15 August 2023: <a href="https://www.mas.gov.sg/news/media-releases/2023/mas-finalises-stablecoin-regulatory-framework" rel="noopener noreferrer nofollow">MAS Finalises Stablecoin Regulatory Framework</a> <br>MAS introduced a regulatory framework for stable coins pegged to SGD or G10 currencies with over SGD 5 million circulation. Compliance leads to MAS regulation, distinguishing from unregulated stablecoins.</p>
<p>03 July 2023: <a href="https://www.mas.gov.sg/news/media-releases/2023/mas-publishes-investor-protection-measures-for-digital-payment-token-services" rel="noopener noreferrer nofollow">MAS Publishes Investor Protection Measures for Digital Payment Token Services</a><br>MAS implemented new regulatory measures for the cryptocurrency sector, emphasizing investor protection and market integrity, requiring service providers to safeguard assets. This decision followed a public consultation from October 2022.<br><br>26 June 2023: <a href="https://www.mas.gov.sg/news/media-releases/2023/mas-proposes-framework-for-digital-asset-networks" rel="noopener noreferrer nofollow">MAS Proposes Framework for Digital Asset Networks</a><br>MAS and CPMI released a report proposing a framework for open digital asset networks, aiming to establish global standards for financial infrastructure.<br><br>21 June 2023 : <a href="https://www.mas.gov.sg/news/media-releases/2023/mas-proposes-standards-for-digital-money" rel="noopener noreferrer nofollow">MAS Proposes Standards for Digital Money</a><br>MAS proposed a universal protocol outlining terms for digital currency use. In a June 21 white paper, MAS introduced Purpose Bound Money (PBM), enabling senders to specify transaction conditions. This collaboration involved international partners.</p>
<p>26 October 2022:<a href="https://www.mas.gov.sg/news/media-releases/2022/mas-proposes-measures-to-reduce-risks-to-consumers-from-cryptocurrency-trading-and-enhance-standards-of-stablecoin-related-activities" rel="noopener noreferrer nofollow"> MAS proposes measures for Safeguarding Crypto and Elevating Stablecoins</a><br>MAS introduced regulatory measures under the Payment Services Act to mitigate cryptocurrency trading risks, ensure stablecoin advancement, and safeguard consumers through risk disclosures, prohibition of credit facilities, and technology infrastructure reinforcement.<br><br><a href="https://www.mas.gov.sg/news/media-releases/2022/mas-issues-guidelines-to-discourage-cryptocurrency-trading-by-general-public" rel="noopener noreferrer nofollow">2022</a>: Singapore banned crypto service providers from promoting their services in public areas or through third parties like social media influencers.<br><br>2020: The Inland Revenue Authority of Singapore ruled that goods services tax (GST)would no longer apply to cryptocurrencies. On the other hand, there are no capital gains taxes in Singapore, so businesses that purchase digital tokens as long-term investments are not liable for taxes on capital gains.&nbsp;<br><br>July, 2020: The firms were ordered to safekeep customer assets under a statutory trust before the year ends. MAS restricted firms from facilitating lending or staking of their retail customers’ assets.<br><br><a href="https://www.mas.gov.sg/news/media-releases/2020/payment-services-act-comes-into-force" rel="noopener noreferrer nofollow">January, 2020</a>: The Payment Services Act first came into effect in Singapore<br><br><a href="https://www.mas.gov.sg/-/media/MAS-Media-Library/regulation/faqs/PD/faqs-on-payment-services-act-2019/Payment-Services-Act-FAQ--7-March-2022.pdf" rel="noopener noreferrer nofollow">2019</a>: The PSA of 2019 allows MAS to oversee <a href="https://coinpedia.org/exchange/" rel="noopener noreferrer nofollow">crypto exchanges</a> and issue required licenses. MAS requires all exchanges to adhere to AML/CFT requirements. They must also adhere to the Financial Advisors Act, Insurance Act, Securities and futures ACt and Trust Companies Act.&nbsp;</p>
<p><a href="https://www.mas.gov.sg/~/media/MAS/Regulations%20and%20Financial%20Stability/Regulations%20Guidance%20and%20Licensing/Securities%20Futures%20and%20Fund%20Management/Regulations%20Guidance%20and%20Licensing/Guidelines/A%20Guide%20to%20Digital%20Token%20Offerings%20%2014%20Nov%202017.pdf" rel="noopener noreferrer nofollow">2017</a>: The Monetary Authority of Singapore clarified that it had regulatory authority over the offering and issuance of digital tokens in Singapore, as they fall under the definition of “capital market products” . In addition, MAS also issued “notice on prevention of money laundering and countering the financing of terrorism (AML/ CFT).&nbsp;</p>
<p>Also Read : <a href="https://coinpedia.org/research-report/global-crypto-adoption-report/" rel="noopener noreferrer nofollow">Global Crypto Adoption Report 2023 : A Pivotal Year for Crypto Acceptance Worldwide</a></p>
<h2 class="wp-block-heading" id="h-final-thoughts"><strong>Final Thoughts</strong></h2>
<p>Singapore is considered quite favourable when it comes to cryptocurrencies. With the evolution in technology and growing acceptance for cryptocurrencies, Singapore is constantly adapting itself to the changing scenario. The country holds a place in all crypto traders’ list of top countries to choose for easy and well-governed crypto activities.</p>

Crypto Regulations in Singapore 2024

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