In a recent report, the Monetary Authority of Singapore is set to expand its oversight prowess over the cryptocurrency industry via the newly proposed Financial Institution (Miscellaneous Amendment) Bill 2024, which targets firms holding Capital Markets Services Licenses (CMSL) but engaging in decentralized business operations. The bill will enable MAS to give directives on policies and guidelines for decentralized business operations like payment token products and Bitcoin futures in the digital assets sector.
According to the report, the Monetary Authority of Singapore has introduced a new bill, the Financial Institution Bill 2024, aimed at regulating crypto firms with the CSML that offer unregulated business deals to investors within the territory. Reports revealed that if the parliament passes the bill, MAS’s ruling powers over the crypto firms operating decentralized derivatives and products would significantly increase.
MAS To Amass More Power Via New Bill
In addition, the report points out that MAS has jurisdiction to give orders over the regulation and conduct of unregulated crypto activities. The new development is a significant milestone because CMSL holders most times offer crypto derivatives like BTC futures and some other derivatives related to payment tokens, currently categorized as unregulated and traded on offshore crypto exchanges.
Furthermore, unregulated crypto derivatives have always posed potential risks to exchanges’ regulated activities, a huge concern, and hence, warranted the newly proposed legislation. Reports revealed that MAS had once led a move that helped mitigate risks involved in retail investments in unregulated business dealings.
However, the bill goes further to empower MAS with the authority to implement minimum protocols and also issue written directives concerning unregulated business operations. The new development points out the effort of the authority to maintain a strong regulatory framework, especially for the fast-paced and rapidly changing landscape of the digital assets exchanges and MPI (Major Payment Institution) licenses.
MAS Recent Regulatory Actions On Foreign Firms
In addition, reports revealed that the new development occurred when the MAS issued numerous measures aimed at constraining speculative investments in digital assets. The regulator rolled out a set of guidelines in November to discourage speculations of such nature. Also, in August 2023, the MAS adjusted its regulatory standards for stablecoins, helping Ripple and Circle obtain their MPI permits.
These strings of developments showcase the proactive approach of the Monetary Authority of Singapore towards mitigating the risks involved in digital assets investments. Also, the newly proposed bill suggests investigative capabilities to be bestowed on the MAS, giving power to the MAS to obligate individuals to be present for interviews, submit specified documents, and so on.
Furthermore, under the proposed bill, the MAS would have jurisdiction to enforce court orders over evidence seizing and approving agencies that foreign regulators assign to investigate financial institutions in Singapore. More so, an aspect of the proposed bill emphasizes the promotion of comprehensive supervision and global alliance in financial rules.
Impacts Of The Bill On The Cryptocurrency Markets
According to the report, the proposed bill is expected to have a significant impact on the regulatory landscape of crypto assets in the country. By increasing the oversight power of MAS, the new bill aims to ensure that firms holding MPI licenses and CMSL conduct their activities under regulatory standards that prioritize consumer protection and financial equilibrium.
Moreover, the development would possibly impact the operational processes of crypto exchanges and related firms, coercing them to comply with the stricter protocols and rules that the Singaporean regulator plans to roll out soon. The focus of the bill is on unregulated business dealings, which has always been a major point of concern in the cryptocurrency market, as many critics slam it for its lack of regulatory presence and transparency.
However, the Monetary Authority of Singapore plans to promote the growth and development of a more reliable and safe business environment for crypto investors by setting minimum protocols and guidelines, according to the report.
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