Monetary Authority of Singapore expands digital assets oversight under new bill

The Monetary Authority of Singapore (MAS) is set to expand the scope of its regulatory oversight over the country’s financial services sector, including the digital asset industry, under a new proposed bill.

The Financial Institutions (Miscellaneous Amendments) Bill 2024 (FIMA) was tabled to parliament by Alvin Tan, the Minister of State for Trade and Industry, on behalf of Deputy Prime Minister Lawrence Wong.

The new bill will strengthen its “investigative, reprimand, supervisory, and inspection” powers, according to MAS. This includes enhancing the central bank’s investigative and evidence-gathering powers, clarifying its power to reprimand financial service companies, and enhancing its ability to supervise and inspect players.

The bill will also expand the bank’s power to issue directions to capital markets services license (CMSL) holders. Under this, MAS noted that some CMSL holders might offer products it doesn’t regulate, such as “[BTC] futures and other payment token derivatives traded on overseas exchanges.”

In Singapore, digital asset exchanges are required to obtain a CMSL license. This ensures that authorities treat them like financial entities, differently from startups offering blockchain solutions.

According to the MAS, offering products such as BTC futures “may pose contagion risks to their regulated activities.”

Under the existing laws, the regulator has issued guidance to all CMSL holders on the risk-mitigation measures they must adopt if they offer unregulated products like digital asset futures to clients. The new bill will add to this, giving the watchdog more bite.

“…the FIMA Bill will now allow MAS to issue written directions on the minimum standards and safeguards that should be in place when CMSL holders and their representatives conduct unregulated businesses.”

Singapore is more conservative with financial products than its peers, like Hong Kong. In November, the MAS issued guidance to virtual asset service providers (VASPs) on restricting retail ‘crypto’ speculation. This included prohibitions against offering trading incentives and ensuring customers understand the risks they face before allowing them to invest.

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