The Monetary Authority of Singapore (MAS) yesterday announced that it will be regulating intermediaries of virtual currencies, such as bitcoin, in the republic to reduce the risk of money laundering and terrorist financing.
According to the central bank, the requirements will be similar to those imposed on money changers and remittance businesses who undertake cash transactions. Under the proposed regulations, virtual currency intermediaries that buy, sell or facilitate the exchange of virtual currencies for real currencies are required to verify their customers' identities and report suspicious transactions to the Suspicious Transaction Reporting Office.
"MAS is taking a targeted regulatory approach to virtual currencies to specifically address money laundering and terrorist financing risks," said Ong Chong Tee, MAS' Deputy Managing Director. The regulations, however, do not extend to the soundness of virtual currency intermediaries and the proper functioning of virtual currency transactions. Ong thus cautioned consumers and businesses on the risks of using virtual currencies such as their volatility due to speculation.
The proposed regulations will be put up for public consultation and implemented within the next 12 months. MAS will also consider additional measures to address the risks of virtual currencies if necessary.