MAS to step up supervision of virtual assets
This is to proactively detect unlicensed activities involving digital payment tokens.
The Monetary Authority of Singapore (MAS) is stepping up with its supervisory and surveillance moves to proactively detect unlicensed activities involving digital payment tokens, said a senior regulator on Wednesday.
It will also use real-time data gathering to boost the regulator's assessment of money laundering and terrorism financing risks for licensed entities that work with digital payment tokens - a class of virtual assets that include bitcoins, said Loo Siew Yee, assistant managing director (policy, payments and financial crime), at the MAS.
The regulator is now experimenting with both in-house and external technologies to review new data points such as transactional information on public blockchains and other sources.
"Such data will provide useful early warning indicators, alongside traditional sources of information such as statutory returns and suspicious transaction reports," said Ms Loo at the International Compliance Association Annual APAC Conference.
"Refining our supervisory approach for a fast-developing new asset class is a major but necessary undertaking for MAS, in order to respond effectively to rapid developments in the environment."
The moves come ahead of the Payment Services Act that will come into effect by January next year. Once it commences, entities performing digital payment tokens services will be licensed under the Act and come under MAS's Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) supervision.
"Given Singapore's position as a major financial and fintech centre, it is natural that digital payment tokens firms would wish to set up here," said Ms Loo.
"MAS has warned consumers of the speculative nature of many of these virtual assets, but from the perspective of combating financial crime we also need to guard against their use for illicit purposes.
"This is especially pertinent given the potential speed, anonymity and cross-border nature of such transactions."
She also said that MAS's next "supervisory focus" will be on financial institutions' controls for countering the financing of terrorism. Among other things, financial institutions should be able to respond "quickly and robustly" to the authorities' requests for information, should there be a need to trace transactions linked to terrorism or terrorism financing.
MAS plans to examine the effectiveness of financial institutions' controls and provide guidance on sound practices, she said.
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