The Digital Chamber’s Post

As Seamless Asia 2025 unfolds, showcasing the latest trends in digital payments, it's noteworthy that the Monetary Authority of Singapore (MAS) has made amendments to the Payment Services Act (PS Act). These changes not only broaden the range of payment services under MAS regulation but also introduce measures aimed at safeguarding users and ensuring the stability of financial systems, particularly concerning digital payment token service providers.

Further enhancements to the Payment Services Act! As the industry continues to grow, even at a more gradual pace, the need to protect consumer funds are still key to the Fintech space and banks which support them.

📊 New research examines the impact of sanctions on decentralized finance In August 2022, the U.S. Department of the Treasury sanctioned #TornadoCash (TC), a decentralized protocol designed to enhance transaction privacy on public blockchains. The sanctions cited TC's role in laundering over $7 billion worth of virtual currency since 2019. TC works by allowing users to deposit funds into smart contracts, pool them with others, and later withdraw them to different addresses—potentially obscuring the transaction trail. While privacy-enhancing, this mechanism can also be exploited for illicit purposes. A compelling study by researchers at the Federal Reserve Bank of New York analyzes how these sanctions affected the #Ethereum ecosystem. Key findings: • TORN token (TC's governance token) value dropped 60% immediately after sanctions were announced • Transaction volumes on TC fell 72% post-sanctions, but some pools have since recovered • Cooperation with sanctions varies along the settlement chain - strongest at the user level, mixed among builders/proposers • Censorship resistance appears fragile, with the inclusion of sanctioned transactions relying heavily on a small number of non-cooperative actors • Non-cooperation does not seem economically motivated, suggesting philosophical reasons drive some actors' decisions The study illuminates the complexities of regulating decentralized systems and raises important questions about censorship resistance. Balancing privacy, regulatory compliance, and decentralization in crypto can be tricky, raising questions about the future of decentralized systems. Credits: Anders Brownworth | Jon Durfee | Michael Junho Lee | Antoine Martin Link: https://lnkd.in/er_6-GAx #Blockchain #Regulation #DeFi #Ethereum #Privacy

The #US House of #Representatives approved the Financial Innovation and Technology for the 21st Century Act (#FIT21) with a 279-136 vote. It represents the #crypto industry's most significant legislative win to date The FIT21 Act clarifies the roles of the U.S. Securities and Exchange Commission (#SEC) and the U.S. Commodity Futures Trading Commission (#CFTC) in regulating #digital assets. For more details: https://bit.ly/4aCK3qF Key provisions of the FIT21 Act include: 1. Consumer Protection: (a) Developers must provide clear information about their projects. (b) Exchanges, brokers, and dealers must: (i) Disclose important information to customers. (ii) Keep customer funds separate from their own. (iii) Register and meet operational standards to avoid conflicts of interest. 2. Market Strengthening: (a) Provides a clear way for developers to raise funds. (b) Clarifies which transactions fall under SEC or CFTC rules. 3. Institutional Protection: (a) Defines the roles of SEC and CFTC. (b) Sets up registration requirements for institutions to legally serve customers in the digital asset market.

Top members of the United States House Financial Services Committee and its Subcommittee on Digital Assets, Financial Technology and Inclusion have requested an extension of the public comment period for a proposed rule by the Consumer Financial Protection Bureau (CFPB). The rule, which aims to redefine the regulatory landscape for digital consumer payment applications, has drawn scrutiny for its potential impact on the digital asset sector. Stay tuned for updates on this developing story. #digital assets #regulation #finance #CFPB

Happening in 15 mins time! If you happen to be in the area, do drop by MBFC Tower 1, #14-02 for a briefing on the impact of the new 𝙋𝙖𝙮𝙢𝙚𝙣𝙩 𝙎𝙚𝙧𝙫𝙞𝙘𝙚𝙨 (𝘼𝙢𝙚𝙣𝙙𝙢𝙚𝙣𝙩) 𝘼𝙘𝙩 𝟮𝟬𝟮𝟭 ("𝙋𝙎𝘼𝘼") and 𝙋𝙖𝙮𝙢𝙚𝙣𝙩 𝙎𝙚𝙧𝙫𝙞𝙘𝙚𝙨 𝙍𝙚𝙜𝙪𝙡𝙖𝙩𝙞𝙤𝙣 (w.e.f. 4 April 2024) on your business. The PSAA expands the current scope of regulated payment services under the 𝙋𝙖𝙮𝙢𝙚𝙣𝙩 𝙎𝙚𝙧𝙫𝙞𝙘𝙚𝙨 𝘼𝙘𝙩 𝟮𝟬𝟭𝟵 (“𝙋𝙎𝘼”) and gives the Monetary Authority of Singapore (MAS) more powers under the PSA to impose consumer protection measures on DPTSPs [PS-G03]: (1) an opt-in regime requiring DPTSPs to obtain express consent from customers to be treated as accredited investors; (2) segregation of customers' assets; (3) implementing robust risk management controls; (4) requirement to make certain disclosures to customers; (5) restrictions on dealing with assets belonging to retail customers. 𝗘𝘅𝗽𝗮𝗻𝗱𝗲𝗱 𝘀𝗰𝗼𝗽𝗲 𝗼𝗳 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗲𝗱 𝗽𝗮𝘆𝗺𝗲𝗻𝘁 𝘀𝗲𝗿𝘃𝗶𝗰𝗲𝘀: 👉🏻 custodial services for DPTs 👉🏻 facilitation of transmission and exchange of DPTs 👉🏻 facilitation of cross-border money transfers between different countries (including moneys not received in Singapore) Looking forward to hear from Nizam Ismail and TzeChing Chang on what needs to be done in order for impacted entities to continue their activities while MAS reviews their licensing application. Kudos to Digital Assets Association and Chia Hock Lai 谢福来, CFtP for organising this event.

Hopefully, it will be a good and steady step forward, and a secret to success. In the Redefi project, we are entering a new era of virtual cards – they are not only affordable but also incredibly comprehensive, without any intermediaries or gatekeepers.#ReDeFi #OnchainMoney https://lnkd.in/dXmihqXn

The SEC’s Spring 2024 agenda reveals major updates to market structure and best execution regulations. Key proposals include: Regulation Best Execution: A best execution standard with new Exchange Act rules 1100, 1101, and 1102, requiring robust policies for conflicted transactions with retail clients. Order Competition Rule: Requiring retail equity orders to be exposed in auctions before being internalized. Expanded Exchange Definition: Affecting fixed income markets and crypto asset securities. Firms must act now to review and enhance their best execution policies in preparation for these sweeping changes. #BestExecution #MarketStructure #SECRegulations #Compliance #FinanceIndustry

*** Towards a Digital Clearinghouse 2.0 ***   The future of digital governance and effective enforcement in the digital world requires a thorough discussion to foster cross-regulatory cooperation and address the existing fragmentation in governance. The current digital landscape is characterised by the enforcement of multiple regulatory frameworks happening in silos. Data protection, consumer rights, and emerging regulations now overlap significantly. However, regulating the digital economy cannot be done in silos. Today’s EDPS seminar has explored the complexities of such cooperation and launched the proposal to work on the establishment of a Digital Clearinghouse 2.0. This enhanced platform would serve as a structured forum for authorities to coordinate their efforts, share expertise, and resolve inconsistencies more effectively. In his closing remarks, Wojciech Wiewiorowski highlighted the importance to enhance such cooperation and to move to practice.

🔍 Transforming the Financial Sector: The EU Digital Identity Wallet 🔍 The EU Digital Identity Wallet is set to revolutionize the financial sector, and banks are uniquely positioned to provide trusted identity wallets. To succeed, banks need to start preparing. Missed our live webinar? Don't worry! You can now watch the Nets-hosted session where top industry experts Kristian T. Sørensen, Oscar Santolalla and Viky Manaila explore the transformative impact of the EUDI Wallet on European financial institutions and discuss how banks can prepare for these changes. 👉 Watch the webinar recording here: https://lnkd.in/dcCJ537A #EUDIWallet #EUDIframework #DigitalIdentity #eIDSolutions #eIDAS2.0