The Monetary Authority of Singapore (MAS) has notified several digital payment service providers that they will be approved to operate in the city-state. The move that comes after a crypto exchange is approved for a license will secure Singapore’s status as Asia’s crypto hub, industry watchers say.

Digital payment service providers are authorized to operate in Singapore

The Central Bank of Singapore has notified digital payment service providers that it will license them to operate under their jurisdiction. MAS announced “several” of 170 applicants that it is “ready to grant them payment service licenses” as long as they take steps to meet the requirements, the regulator confirmed to the “This Week in Asia” edition of the South China Morning Post Office. So far, two requests have been denied and another 30 withdrawn for failing to meet anti-money laundering standards.

Singapore Monetary Authority.

The news comes after the Australian cryptocurrency exchange Independent Reserve announced earlier this week that it had received “approval in principle” from Singapore’s monetary authority for a license to operate as a regulated provider of digital payment token services. The trading platform stated in a statement that it was among the first virtual asset service providers to receive such approval in the city.

The latest MAS announcement was received with gusto by experts working in the crypto space, the Hong Kong-based daily pointed out. Grace Chong, a lawyer at Simmons & Simmons and a fintech and regulatory advisor in Singapore, described the move as “important” and “timely”. Banks and asset managers have expanded their range of digital assets, she noted, emphasizing:

Technological change is turning finance on its head and we are seeing strong institutional interest in digital assets.

MAS moves to attract crypto companies to Asia’s crypto hub

According to Chong estimates, 90 providers of digital payment token services in Singapore have already been exempted. In March 2020, MAS granted a number of crypto companies an exemption from holding a license under its new Payment Services Act, Bitcoin.com News reported. It published a list of exempt companies, including well-known names like Binance, Coinbase, Upbit, and Wirex.

MAS’s decision to move to permanent licensing “gives reassurance to many legitimate crypto companies that have started operations here,” noted Kenneth Bok, CEO of Blockchain Advisory Blocks. Jason Davis, Associate Professor of Entrepreneurship and Family Business at Insead, described this as a “cautious next step” towards financial innovation. Davis expects more crypto exchanges to seek approval to operate in Singapore:

Enabling cryptocurrency exchanges to operate in Singapore is an important part of the country’s strategy of being friendly to companies with new digital types of assets … Exchanges may be just the first step in developing a thriving crypto ecosystem in the heart of Southeast Asia.

Industry watchers expect the development to increase the number of diverse crypto companies moving to Singapore and cementing its status as the leading Asian crypto financial center. For example, the city’s regional rival, Hong Kong, has opted for stricter regulatory policies.

According to Sumit Agarwal, professor of finance and economics at the National University of Singapore, Beijing’s growing influence on Hong Kong is fueling “fear in the minds of investors” as crackdown on crypto mining and trading in China continues. “People are realizing that Singapore regulators are more adventurous because it’s a small economy and decisions can be made faster,” Agarwal said.

Do you agree that Singapore will become a major crypto-friendly travel destination in Asia? Let us know in the comments section below.

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