Month: May 2020

MA of Singapore Grants Temporary Payment Services Licenses to Crypto Firms

In line with the recent passing of the Payment Services Act, the MAS announced that temporary licenses have been granted to 7 cryptocurrency companies.

The Monetary Authority of Singapore (MAS) named Binance, Bitstamp, Coinbase, Gemini, Upbit, Luno and Wirex as the only cryptocurrency operators permitted to act as payment service providers up to six months. Within the six-month period, the related license applications of the said crypto firms will be approved or rejected by the MAS.

The Monetary Authority granted temporary license-exemption to the aforementioned companies, because they complied with the prerequisite of giving notification of their cryptocurrency operations in Singapore, even before the Payment Services Act passed legislation in January 2020. The MAS, which acts as the central bank of Singapore, made it clear that the unlicensed status will cease once the institution approves or rejects the related applications for payment-services licensure in the country.

Overview of the Payment Services Act of Singapore

The Payment Services Act is described as one that sets the framework for the dynamic and flexible regulation of Singapore’s payment system and providers of payment services. The purpose of which, is to establish regulatory certainty aimed at safeguarding the interest of consumers, whilst encouraging growth and innovation of the country’s payment services and FinTech systems.

”Specific Payment Services”

The regulatory framework of the PS Act applies to licensed payment Institutions that provide “specific payment services” such as account issuance, e-money issuances, merchant acquisitions, domestic money transfers, inward cross-border money transfers, and digital payment tokens. Under the Act, the payment services of cryptocurrency companies fall under the digital payment token classification.

Distinction of Licenses to Conduct Payment Services as a Business, from License to Conduct Money-Changing Services as a Business

Although some payment services may include foreign currency conversion, a licensed payment service provider must be a licensed money-changer when including stand-alone money-changing services as part of its business activities. In the same way, a licensed money changer can conduct only money-changing services, unless the operator obtains a duly approved license to provide payment services.

Distinction of Payment Services from Banking Services

The PS Act also contains prohibitions that distinguish payment services from banking services, by stating that:

Licensed payment service providers are prohibited from storing or accepting e-money as deposits on behalf of Singapore residents and of facilitating e-money cash withdrawals in Singapore dollars. This suggests that all e-money transactions will cover only direct payment transactions.

Moreover, payment service providers conducting e-money issuance as payments are prohibited from lending its customers’ money, or using customers’ money to finance any of the business activities being performed in connection with payment-service operations.

The above distinctions clearly state beforehand that for inquiries on whether the licensed money lender SG City Loan recommends, can loan out cryptocurrency money, the answer is no.

Posted by Lucia Kerri in Crypto

Does the Covid-19 Pandemic makes a Beautiful Time to Invest in Bitcoin?

Leading cryptocurrency which is Bitcoin Is deemed to be a hedge towards inflation primarily because of the reason that its supply has a ceiling of 21 million while its monetary policy is predesigned to reduce the expansion supply by 50% every 4 years. Because of this, any deflationary collapse of the cryptocurrency might be seen as price-bearish development.

At times of deflation, cash is mostly the king due to the drop in general price level is boosting the purchasing power of monetary unit or its ability to buy services and goods. According to Erick Pinos, in comparison to inflation, when people are trying to get the most of their money due to its losing value, during deflation, people become more comfortable with the fiat currency because the value is going up.

Growing Steadily

The rush for cash on the other hand might not have negatively impacted Bitcoin’s prices. This is because deflation will boost the buying power of crypto. As a matter of fact, the rise in purchasing power draws bigger demand for Bitcoin since crypto is being used already as a mode of payment.

Actually, it isn’t strange for there are countless of businesses, merchants and brands that are accepting Bitcoin as payment and many more are beginning to realize the benefits associated to crypto and by diversifying revenue streams.

Not just that, cryptocurrency has great appeal as being a medium of exchange and will most likely keep its trend. Thanks to the continuous growth of technology especially at these times of pandemic. Well, aside from the fact that Bitcoin and other digital currency is being used as a mode of payment, you can see it as well in the financial market. In fact, many people are trading cryptocurrency and using several indicators such as mt4 indicators to gauge where the trend will go and make more money from it.

Digital Gold

From the time of its invented and introduced to the public, Bitcoin has been named as “digital gold”. Much like actual gold, cryptocurrency is divisible, fungible, durable, recognizable and scarce. Both assets do share the same features which are being functional and practical. Bitcoin though has an actual utility as a mode of payment; something that gold is lacking of.

In fact, both the Federal Reserve and the US government released an enormous amount of liquidity in the system for the past several weeks in an effort to contain the fallout from Covid-19 outbreak. Thing is, many of the central banks and governments are having a hard time keeping up with it. Hence, if the virus never stops, it might result to several corporations going to default, investors might have lose trust in using traditional finance and seek for alternative similar to cryptocurrencies and Bitcoin.

Posted by Bella Isolde