Under the purview of the Singapore Payment Services Act, the supervisory authority disseminated two proposals for oversight of the digital asset ecosystem in the form of consultation materials a week ago (PSA).

The act aimed at regulating the payment system was successfully passed by the parliament in 2019 and is already in effect. In addition to this, the PAS would provide the MAS the authority to oversee and control the operations of payment service providers.

Despite this, the MAS authorized Circle to operate as a significant payment institution. The company would now be able to issue crypto assets and process local as well as international payments thanks to the new approval. Paxos, on the other hand, has been granted permission to provide services related to digital payments in Singapore.

In the meantime, both stablecoin issuers have been granted legal permission to conduct business within the nation. As a direct consequence of this, their stablecoins that are pegged to the US dollar (USDC and USDP) will now operate as digital token payment assets. It is important to note that Circle is the organization responsible for the USD Coin (USDC), whilst Paxos is the issuer of the Pax Dollar (USDP).

According to Dante Disparte, who serves as the worldwide head of public policy for Circle, the company's acceptance in Singapore would pave the way for further expansion in crypto payment methods. He went on to say that cryptocurrency had the possibility of revolutionizing the payment system and propelling economic expansion.

Because it has such accommodating legislation, Singapore stands to gain from the novel payment systems of stablecoins, as was mentioned by Disparte.

Jeremy Allaire, one of the co-founders of Circle, disclosed that obtaining a license in "one of the global financial hubs" will strengthen Circle's ability to expand regionally and internationally.

Singapore's Changing Regulatory Landscape

It is unknown how many other digital asset service providers will follow in the footsteps of Circle and Paxos in the wake of Singapore's decision to relax its regulations on cryptocurrencies. Since the end of the previous year, MAS has declined more than 100 of the 170 applications that it has received.

In addition, in 2022, the regulator made their already stringent requirements even stricter in response to the incident that involved Three Arrows Capital, a company established in Singapore that is now defunct (3AC). However, many people working in the country's cryptocurrency industry feel that the Malta Financial Services Authority (MAS) will be harsher and more stringent in its enforcement of laws for the industry.

The nation's long-term goal is to reclaim its place as a safe haven for cryptocurrency investors worldwide. In spite of this, Singapore is proceeding with extreme care because of the desire from retail investors for a growth in virtual financial products.

In the meantime, the largest bank in Singapore, the DBS, has announced that it will be expanding into cryptocurrency trading services for certified investors who are able to meet the stringent conditions.

In another recent development, a poll that was conducted by KPMG found that individuals in Singapore who have a high net worth are the ones pushing the adoption of cryptocurrencies. It went on to say that influential people had helped enhance confidence in the industry, which was further fueled by the investments made by mainstream institutions.

A significant number of the nation's traditional financial heavyweights have discredited the idea held by the authorities that investing in cryptocurrency is a dangerous venture for retail traders. As a direct consequence of this, the majority of large institutions have committed a sizeable portion of their investment portfolio to cryptocurrencies, with a particular emphasis on stablecoins, Bitcoin, and Ether.

Despite this, analysts believe that the allocations are too low, but they anticipate that things will change once the general market rebounds. Additionally, KMPG highlighted the fact that Singapore's crypto rules will continue to advance.