Singapore’s Cryptocurrency Regulations in 2024: Ensuring Accuracy, Smoothness, and Preservation of Proper Nouns
Singapore has a high adoption rate of 11.05% due to the tech-savviness of its population, making it a pro-crypto country. It has been an early adopter of cryptocurrencies, creating a crypto-friendly environment with basic regulations in place.
Cryptocurrency is not recognized as legal tender in Singapore, but it can be used as an alternative form of payment. The country has clear regulations on Bitcoin and other assets, with strict anti-money laundering and counter-terrorism financing laws. The Payment Services Act (PSA) was passed in 2019 to clarify the legal status of cryptocurrencies.
Under the PSA, the Monetary Authority of Singapore (MAS) regulates Digital Payment Token (DPT) service providers. The law requires businesses operating in the crypto realm to obtain a license. The licensing requirements fall under the Securities and Futures Act (SFA). MAS has the authority to monitor crypto activities in Singapore.
DPT service providers can apply for three types of licenses based on their average monthly transactions. These include a money changer license for those providing money-changing services, a standard payment institution license for those with lower transactions, and a major payment institution license for those with higher transactions. Applicants must have a presence in Singapore, comply with the FATF’s “crypto Travel Rule,” and meet all AML/CFT requirements to obtain a license.
In terms of taxation, Singapore does not impose capital gains tax or income tax on individual investors in crypto. However, a goods and services tax of 8% may apply to the buying, selling, and trading of crypto that is not officially labeled as DPTs. Profits from professional trading and other business activities are subject to income tax.
For miners, if Bitcoin mining is considered a hobby, gains are not taxable and mining expenses are not deductible. However, if mining is conducted as a business activity, gains are taxed as income. Companies registered with the Accounting and Corporate Regulatory Authority are also subject to corporate income tax.
Individuals who stake and lend crypto and earn SGD 300 or more in yearly income may be subject to income tax on their gains. The Inland Revenue Authority of Singapore (IRAS) provides guidance on crypto tax and how to calculate income related to cryptocurrency trading activities.
Recent regulations in Singapore include measures introduced by MAS in 2024. These measures focus on identifying and mitigating conflicts of interest, publishing policies for listing DPTs, and establishing procedures for handling customer complaints and disputes.
Singapore has been progressively implementing regulations on cryptocurrencies since 2017, with MAS having regulatory authority over digital tokens. The PSA of 2019 allows MAS to oversee crypto exchanges and issue licenses, ensuring compliance with AML/CFT requirements and other financial laws.
In conclusion, Singapore is known for its favorable stance on cryptocurrencies. With its technological advancements and acceptance of crypto, the country continues to adapt to the changing landscape. It is a preferred choice for crypto traders due to its easy and well-regulated environment for crypto activities.