With the ongoing development in the crypto sector, the regulators have recognized the benefits of digital assets in stimulating economic growth. The need to tap into the benefits of cryptocurrency has inspired global regulators to step up and regulate the digital space. In an advanced communication, policymakers in Singapore drafted a new bill to regulate the financial sector.
Policy Makers in Singapore Formulate New Bill
The new Financial Institutions Miscellaneous Amendments (FIMA) bill will grant the Monetary Authority of Singapore (MAS) legal powers to supervise the crypto industry. The bill was submitted before the Singaporean parliament for further review.
This implies that the MAS will exercise its regulatory powers over the crypto sector if approved. The FIMA bill mandates the MAS to oversee the running of capital markets services license (CMSL) holders.
The report demonstrated that occasionally, the CMSL has been caught on the wrong side of the law due to unregulated business practices. The violation of the law posed a threat to CMSL-regulated activities, including Bitcoin futures offerings and other crypto traded on international exchanges.
Even though the MAS had earlier provided effective measures to address the risks associated with unregulated business activities, the new provision tasks the market regulators with exercising complete control of unlawful activities conducted by retail clients. The new rules allow MAS to force non-compliant crypto firms to appear for interviews and other legal questioning.
Overview of FIMA Bill
The drafted bill grants the MAS power to raid non-compliant firms with or without a warrant. Remarkably, the FIMA bill aligns with the ongoing campaigns by the MAS to restore regulatory sanity in the crypto sector.
Under the new bill, the MAS will be required to formulate guidelines to direct the CMSL holders on the measures to take in case of unregulated business activity. According to FIMA, the local and offshore crypto exchanges will be considered CMSL holders.
This implied that Singapore’s registered Major Payment Institution (MPI) would operate as the CMSL holders. The new rules support the ongoing MAS initiatives to address speculative crypto trading practices.
To address the ongoing speculations for crypto investments, the MAS formulated measures to support digital payment tokens (DPT) in mitigating the risk associated with digital assets.
Last year, the surge in crypto investment in Singapore challenged the MAS to intensify its regulatory action on the digital sector. In August, the MAS amended the existing regulation for stablecoin to create a friendly environment for crypto assets.
Shortly after enforcing the new legislation for stablecoins, the MAS granted Circle and Ripple full licensing to operate in Singapore. The approval of the Circle and Ripple MPI license demonstrated MAS’ commitment to pushing for the mainstream adoption of crypto assets in the region.