Singapore Tightens Rules for Digital Payment Token Providers in Counter-Terrorism
Date: 2024-07-04 Author: Henry Casey Categories: IN WORLD
Raising the Risk Level for DPT Suppliers
Singapore authorities have tightened rules on the use of digital tokens as part of efforts to combat terrorist financing. The Monetary Authority of Singapore (MAS) has raised the risk level for digital payment token (DPT) service providers in its latest update to anti-terrorism regulations.
On 1 July, MAS announced it was upgrading the DPT risk level from medium-low to medium-high as part of its review of the National Terrorist Financing Risk Assessment (NRA) and the National Terrorist Financing Strategy. The move reflects Singapore's efforts to prevent terrorists from using its financial system.
MAS has also identified new potential terrorist financing channels such as “cross-border online payments” and “cross-border fast payment systems”. These measures are aimed at strengthening controls and preventing the misuse of digital tokens for terrorist purposes.
Transformation of Assessment and Strategy
The reason for the updated assessment and strategy is the changing nature of terrorist financing. MAS said the watchdog's aim is to prevent terrorists from exploiting Singapore's status as an international financial, economic and transport hub. The regulator emphasized the need for constant vigilance:
"Terrorists can use Singapore's economic openness to finance their activities. Therefore, vigilance is necessary. As the global environment around terrorism changes, so will the risks in Singapore, which requires an updated assessment and strategy."
DBS Group and Paxos Stablecoin
In line with the tightening of anti-terrorist financing measures, Singapore's largest bank, DBS Group, will hold stablecoin assets issued by Paxos Digital Singapore Pte. Ltd, a subsidiary of Paxos, licensed by MAS.
Paxos has selected DBS as its primary banking partner for cash management and stablecoin custody. Evi Theunis, Head of Digital Assets at DBS, explained the importance of this partnership:
“Our solutions will help stablecoin issuers meet the stringent standards that regulators and customers expect.”
Procrypto Singapore Position
Singapore is actively using blockchain technology to strengthen its status as a global financial center. The country is known for its pro-crypto stance and high level of adoption of digital assets. Over the past year, Singapore has strived to introduce innovative solutions to remain at the forefront of the global financial arena.
Singapore continues to demonstrate its commitment to the security of its financial system while supporting innovation in the digital asset space. Increased oversight of digital payment token providers and strategic partnerships with companies such as Paxos highlight Singapore's serious approach to managing risk and maintaining sustainable financial growth.
