Singapore has recently made changes to its regulations regarding digital payment token providers in an effort to combat terrorism financing risks. The Monetary Authority of Singapore (MAS) has increased the risk level for Digital Payment Token (DPT) service providers from medium-low to medium-high as part of its Counter-Terrorism regulation update.
The MAS highlighted “cross-border online payments” and “cross-border fast payment systems” as potential new channels for terrorist funding activities, emphasizing the evolving nature of terrorism financing. The aim is to prevent terrorists from taking advantage of Singapore’s status as an international financial, economic, and transport hub.
In addition to these regulatory changes, Singapore’s largest bank, DBS Group, has announced that it will be custodying stablecoin assets issued by Paxos Digital Singapore Pte. Ltd, a MAS-licensed subsidiary of Paxos. DBS has been proactive in the crypto space and has become one of the largest holders of Ethereum. Paxos chose DBS as its primary banking partner for cash management and stablecoin custody, with the goal of meeting the high standards expected by regulators and customers.
Singapore has been actively embracing blockchain technology to strengthen its position as a global financial hub. The country’s favorable stance towards cryptocurrencies and high adoption rate have attracted attention in the industry.
These developments reflect Singapore’s commitment to staying ahead of evolving risks in the financial sector, particularly in the context of terrorism financing. By updating its regulations and partnering with innovative companies in the crypto space, Singapore is positioning itself as a leader in the digital economy.