Singapore regulatory sandbox lacks qualified crypto payment providers

The Monetary Authority of Singapore (MAS) has said that no businesses have qualified to participate in its FinTech Regulatory Sandbox framework as cryptocurrency payment providers.

Responding to a letter criticizing the Singaporean government’s lack of public consultation and oversight on crypto adoption published in the Financial Times, the MAS clarified that the country does not have a “crypto sandbox” but rather a sandbox that supports a broad range of fintech experimentation.

The letter criticized Singapore for “unwisely” allowing crypto companies access to Singapore’s Fast and Secure Transfers (FAST) interbank payment system. The electronic funds transfer system enables customers of participating entities to transfer Singapore dollar funds from one entity to another in Singapore.

Singapore’s FAST overview. Source: fastpayments.worldbank.org

However, the MAS clarified that all businesses with a valid bank account can access the FAST system, including crypto businesses, stating, “Payments through FAST are in fiat currencies, not cryptocurrencies.”

The regulator then stated that the rising malware scam cases in Singapore had nothing to do with cryptocurrencies, claiming that, on the contrary, such scams are more prevalent in the fiat economy:

“These scams entail fraudsters taking control of customers’ mobile devices and effecting unauthorized transfers through the banking system in fiat currencies.”

In its fight against money laundering, Singapore provides operational licenses to crypto businesses that can showcase robust Anti-Money Laundering (AML) controls.

“As these measures are progressively implemented from the end of this year onwards, Singapore will have one of the strictest regulatory regimes in the world governing retail access to cryptocurrencies.”

In this regard, the MAS recently consulted the public on a suite of regulatory measures to mitigate the risks posed by cryptocurrencies to retail customers.

Former MAS Chair Tharman Shanmugaratnam — who has historically considered crypto as risky investments — won Singapore’s presidential race.

The president-elect reportedly once called crypto assets “highly volatile” and “highly risky as investment products” in 2021 warnings to Singapore-based users in his role as MAS chair.

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