Is Crypto Legal in Singapore?
Yes, owning and exchanging cryptocurrencies is legal in Singapore. The Payment Services Act (PSA) 2019 classifies crypto as a "medium of exchange," enabling its use for goods/services and debt discharge. Companies handling cryptocurrencies (e.g., exchanges, custody providers) must implement KYC, AML, and CFT procedures to comply with PSA regulations.
The Monetary Authority of Singapore (MAS) regulates crypto as Digital Payment Tokens (DPTs), defined as:
- Digital representations of value expressed as units.
- Not pegged to any fiat currency but accepted as payment.
- Electronically transferable/storable.
Cryptocurrencies broadly fall into two categories:
- E-money: Backed 1:1 by fiat (e.g., StraitsX SGD/XSGD).
- DPTs: Non-fiat-backed tokens (e.g., Bitcoin).
Regulatory Bodies
- MAS: Singapore’s central bank oversees crypto under the Monetary Authority of Singapore Act. Responsibilities include banking, insurance, and payments sector supervision.
AML/KYC Requirements
Under PSA-N02, crypto businesses must:
- Conduct Risk Assessments: Segment users by risk level.
- Customer Due Diligence (CDD): Collect ID details (address, DOB, nationality).
- Enhanced Due Diligence (EDD): For high-risk users (PEPs, high-risk jurisdictions).
- Monitor Transactions: Flag unusual patterns.
- Submit STRs: Report suspicious activity to Singapore Police/MAS.
- Maintain Records: Adhere to Singapore’s Personal Data Protection Act.
The Travel Rule
Effective since January 28, 2020, Singapore’s Travel Rule (PSN02) mandates:
- Transactions < SGD 1,500: Share originator/beneficiary names + account numbers.
- Transactions ≥ SGD 1,500: Additional details (addresses, DOB, birth/incorporation place).
Licensing Requirements
Crypto businesses need a Digital Payment Service Provider License under PSA’s 7 activity tiers:
- Account issuance
- Merchant acquisition
- E-money issuance
- Cross-border transfers
- Domestic transfers
- DPT services
- Money changing
Stablecoin Regulations
- PSA: Classifies fiat-backed stablecoins as e-money. Issuers require a PSA license.
- Algorithmic/non-collateralized stablecoins: Not covered.
- Example: StraitsX’s XSGD (SGD-backed, Travel Rule-compliant).
FAQs
1. Can I use crypto to pay for goods in Singapore?
Yes, the PSA recognizes crypto as a legal medium of exchange.
2. What’s the penalty for non-compliance with AML rules?
Violations may result in fines or license revocation under MAS supervision.
3. Are decentralized exchanges (DEXs) regulated in Singapore?
Yes, if they facilitate DPT services—they must comply with PSA licensing.
4. How does Singapore’s Travel Rule compare to FATF’s?
Singapore mirrors FATF guidelines but specifies SGD 1,500 as the reporting threshold.
5. Are stablecoin issuers required to hold reserves?
Yes, fiat-backed issuers (e.g., StraitsX) must maintain 1:1 reserves in MAS-approved banks.
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