Singapore Fintech Regulatory Updates - Jan 2018

Singapore says it won’t ban cryptocurrency trading

Deputy Prime Minister (PM) and minister in charge of the Monetary Authority of Singapore (MAS) Tharnam Shanmugaratnam confirmed a broadly hands-off policy regarding cryptocurrencies. He was responding to questions in Parliament. “There is no strong case to ban cryptocurrency trading here,” the deputy PM said. “For now, the nature and scale of cryptocurrency trading in Singapore does not pose risks to the safety and integrity of our financial system,” he continued. “...Further, connections between cryptocurrency trading and Singapore’s financial system are also not significant at present.”

ICOs in Singapore need specialist advice from tax perspective

Blockchain players wishing to conduct Initial Coin Offerings (ICO) out of Singapore will need legal advice from a regulatory perspective, as well as specialist advice: Advice on taxability of ICO proceeds, the timing of such taxation, and Goods and Services Tax (GST) implications of token issuance. The issuer may also be subject to income tax on subsequent realization gains. The relevant points are the exchange on which the tokens or coins are sold and the location of the controlling minds behind the decision to sell. The issuer must also consider if the transfer of pre-mine tokens to promoters and key personnel who are based in Singapore will be subject to GST.

Central banks must ensure cryptocurrencies are not parasites: BIS

As bitcoin and altcoins plunged from their January bubble heights, Bank for International Settlements general manager Agustín Carstens warned that the authorities must “act against the invasive spread of cryptocurrencies … For money to keep its value, it must be backed by accountable institutions.” He referred to bitcoin as “a combination of a bubble, a Ponzi scheme and an environmental disaster.” Carstens called on central banks to ensure cryptocurrencies do not become “parasites” on the existing financial infrastructure. Access to legitimate banking and payment services, he said, should be limited.