The recent update by the Monetary Authority of Singapore (MAS) has brought about an increase in the risk level of Digital Payment Token (DPT) service providers. This regulatory change, announced on July 1, resulted in the elevation of DPTs to a medium-high risk level from their previous medium-low rating. The MAS made this decision as part of its comprehensive review of Singapore’s Terrorism Financing National Risk Assessment (NRA) and National Strategy for Countering the Financing of Terrorism. The regulatory body also highlighted the emergence of “cross-border online payments” and “cross-border fast payment systems” as potential avenues for terrorist funding activities. The evolving nature of terrorism financing served as the driving force behind the updated assessment and strategy.
The MAS underscored the importance of preventing terrorists from taking advantage of Singapore’s reputation as a global financial, economic, and transport hub. The regulator emphasized the necessity for constant vigilance in light of the evolving global terrorism landscape. The statement issued by MAS stated, “Terrorist actors may exploit Singapore’s economic openness as an international financial, business, and transport hub for terrorist funding purposes. There is therefore a need for constant vigilance. Furthermore, as the global terrorism landscape evolves, Singapore’s terrorist funding risks will evolve too, hence this refreshed assessment and strategy.”
Simultaneously, DBS Group, Singapore’s largest bank, announced its collaboration with Paxos Digital Singapore Pte. Ltd, a MAS-licensed subsidiary of Paxos. DBS Group will be responsible for safeguarding stablecoin assets issued by Paxos Digital Singapore Pte. Ltd. This partnership signifies DBS Group’s supportive stance towards cryptocurrency, as it has discreetly become one of the largest holders of Ethereum. Evy Theunis, the head of digital assets at DBS Group, emphasized that the bank aims to assist stablecoin issuers in meeting the stringent standards expected by regulators and customers. He mentioned, “Having examined all relevant aspects that come with managing reserve assets, stablecoin issuers will find that our solutions will help them meet the robust standards regulators and customers expect from them.”
Over the past year, Singapore has been actively leveraging blockchain technology to strengthen its position as a global financial center. The country has gained recognition for its favorable stance towards cryptocurrencies and its high rate of adoption. By embracing innovative solutions and implementing updated regulations, Singapore continues to demonstrate its commitment to remaining at the forefront of financial technology advancements.