The Metaverse and Web 3.0 is very wide. For this section, we shall focus on the overview of laws covering blockchain, cryptocurrencies and NFT (non-fungibles tokens).
I. The Laws Governing Blockchain
A blockchain is a decentralized, digitally distributed public ledger based on the nodes of a computer network. Blockchain is a form of technology and the laws governing it will essentially be premised on how the technology is used.
II. The Laws Governing Cryptocurrencies
A. Legal Tender
Cryptocurrencies are not legal tender in Singapore in the way traditional fiat currencies are. However, they are subject to AML and CFT regulations, Payment Services Act 2019 (PSA) and other governing laws and regulations which usually govern fiat currencies.
B. Key Legislations
- Financial Services and Markets Act 2022 (“the Act”) which is passed by Parliament on 5 April 2022 and given assent by the Present on 25 April 2022 is a key legislation governing the conduct of cryptocurrency businesses in Singapore. The main thrust of the Act focuses on three main parameters (i) monetary stability (ii) the development of Singapore as a financial centre, and (iii) the financial situation of Singapore generally.
- The Act 2022, however, is not to be read in isolation. Other pertinent acts include and is not limited to:
- (a) Financial Advisers Act 2001
- (b) Financial Holding Companies Act 2013
- (c) Income Tax Act 1947
- (d) Monetary Authority of Singapore Act 1970
- (e) Mutual Assistance in Criminal Matters Act 2000
- (f) Amendment of Payment Services Act 2019
- (g) Precious Stones and Precious Metals (Prevention
of Money Laundering and Terrorism Financing) Act 2019 - (h) Amendment of Securities and Futures Act 2001
- (i) Amendment of Variable Capital Companies Act 2018
- (j) Securities and Futures (Amendment) Act 2017
- (k) Financial Services and Markets Act 2022
3. Essentially, it is a balance between pushing frontiers of innovation in the Metaverse-Web 3.0 space and the need to safeguard Singapore’s reputation and integrity as a global financial centre.
III. Laws Governing NFTs
- At present, there are no specific legislation governing NFTs in Singapore. By way of analogy, they are art pieces in digital form.
- However, if the NFTs space gains traction amongst the populace or bear semblance of being a security, it is not unforeseeable that the authorities may step in with laws and regulations as needed.