Singapore to Implement Cryptocurrency Regulations in 2024
Singapore has a high adoption rate of 11.05% due to its tech-savvy population, making it a pro-crypto country that supports the growth of cryptocurrency. It has been an early adopter of cryptocurrencies, creating a crypto-friendly environment with basic regulations in place.
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Cryptocurrency is not considered legal tender in Singapore, but it can be used as an alternative form of payment. While it is not officially recognized as currency, it is legal in Singapore, and there are clear regulations surrounding Bitcoin and other assets. The country has strict anti-money laundering and counter-terrorism financing laws.
In 2019, the Payment Services Act (PSA) was passed to provide clarity on the legal status of cryptocurrencies. It established a regulatory framework for Digital Payment Token (DPT) service providers in Singapore. The main law regulating crypto businesses is the PSA, which requires businesses operating in the crypto realm to obtain a license.
The Monetary Authority of Singapore (MAS) is continuously working to improve the regulatory framework for DPT services. The PSA gives MAS the authority to monitor crypto activities in Singapore. There are three types of licenses that DPT service providers can apply for, depending on their transaction volume.
In terms of taxation, Singapore does not have capital gains tax or income tax on crypto for individual investors. However, there is an 8% goods and services tax for buying, selling, and trading crypto that is not officially labeled as DPTs. Profits from professional trading and other business activities are subject to income tax.
Miners are also subject to taxes on their profits. If mining activities are considered a business, the income from mining must be declared as “business income” on annual tax declarations. Companies that mine crypto and are registered with the Accounting and Corporate Regulatory Authority are also subject to corporate income tax rates.
The Inland Revenue Authority of Singapore (IRAS) provides guidance on crypto tax in the country and how to calculate income related to cryptocurrency trading activities.
In terms of regulations, Singapore has implemented various measures over the years. The MAS clarified its regulatory authority over digital tokens in 2017 and issued notices on preventing money laundering and countering the financing of terrorism. The PSA came into effect in 2020, and since then, there have been additional regulations, including investor protection measures and a stablecoin regulatory framework.
Singapore is known for being favorable towards cryptocurrencies and is constantly adapting to the changing landscape. It is considered a top country for crypto traders due to its easy and well-governed crypto activities. As the technology evolves and acceptance for cryptocurrencies grows, Singapore remains at the forefront of the industry.