Corporate Partner Derick Ting and Head of Cybersecurity, Privacy and Data Protection KK Lim comment in the ALB March 2020 Asia Edition

Eversheds Harry Elias Corporate Partner Derick Ting and Head of Cybersecurity, Privacy and Data Protection KK Lim comment in the ALB March 2020 article titled "Crypto Hub". The article was first published on 1 March 2020. 

Crypto Hub

Cryptocurrency regulation in Asia has long been a polarising issue, but Singapore stands out for championing the new phenomenon. The city-state’s new Payment Services Act, which came into force in January, is considered its latest supportive move, and according to lawyers in the market, this is already triggering serious investment interest.

Singapore has emerged as a key hub in Asia for emerging technologies such as cryptocurrencies and blockchain due to its welcoming attitude and its willingness to experiment. The most recent move has been the new Payment Services Act, passed in January, which will regulate cryptocurrency payments and trading enterprises under some aspects of the regulatory regime that currently governs traditional payment services.

Below is an excerpt from the article which features comments from Derick and KK:

Derick Ting, a corporate partner at Eversheds Harry Elias, says the new regulations offer “legitimacy” to businesses operating in the market, and as a result, is triggering broader investment interest in the crypto market. “While there are many jurisdictions which are imposing increasingly stringent rules on digital payments and digital assets, Singapore is one of the few leading international financial centres where applicants have the opportunity to obtain a licence from the Monetary Authority of Singapore to operate legitimately alongside other traditional financial services,” he says.

Further to this point, “obtaining a licence under the Payment Services Act, particularly where one of the licence categories is ‘Digital Payment Token Services’, is effectively seen as a ‘badge of legitimacy’ for companies which deal in what the Payment Services Act refers to as ‘digital payment tokens’ and which may include cryptocurrencies, cryptoassets, or other digital assets,” Ting says.

That “badge of legitimacy” has quickly created more opportunities within the crypto market. Says Ting: “We have seen very strong interest from established players with significant investor backing approach us for advice and support in the licensing application process. At the same time, the added regulatory and compliance cost in applying for the licence is weeding out less serious players who were just trying to ride the hype in cryptocurrency.”

KK Lim, head of cybersecurity, privacy and data protection at Eversheds Harry Elias adds: “The application process includes the applicant agreeing to comply with stringent cybersecurity controls as part of the application assessment regardless of the size of the applicant involved. This is one of the criteria to obtain the ‘badge of legitimacy’ so to speak and is a good policy move and only applicants with the necessary ability to execute these controls are likely to be selected.”

You may read the full article here.

Author: Elizabeth Beattie

Source: Asian Legal Business March 2020 Asia Edition