Cryptocurrencies Are Not Legal Tender, Says Singapore Law Ministry

The ministry has introduced a bill to regulate digital payments to curb money laundering and terror financing.

Singapore’s Ministry of Law has announced that the country does not consider cryptocurrencies as legal tender and ordered businesses to do necessary due diligence before accepting crypto as payments, according to a report by the Business Times.

This came after SK Jewellery, a chain of jewelry stores in the city-state partnered with Singapore-based point-of-sale systems startup Bizkey Network to accept Bitcoin and other digital assets as payment.

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The suspicious transactions involved with the precious stone businesses to launder money has forced the authorities to reiterate its stance on digital assets.

The jeweler, however, is confident that it is following all government rules and regulations while accepting payments including cryptocurrencies.

“The acceptance of crypto merely serves as another option of payment for our customers and, other than it being a more unconventional mode of payment now, it’s business as usual,” an SK Jewellery spokesperson told the Business Times.

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According to the spokesperson, the firm has taken the initiative “to partake in the growth story of the digital economy without exposing itself to unnecessary volatility in the cryptocurrency markets.”

Crypto Payments are Popular

SK Jewellery and its partner Bizkey have launched a week-long ‘Token Day’ campaign until January 27 by giving discounts ranging from 10 to 20 percent to customers paying with cryptocurrencies when purchasing gold and diamonds.

Bizkey claims that the campaign is a huge success as, in three two-hour flash sales, transactions crossed S$30,000.

The Ministry of Law, however, is skeptical of this initiative and believes that it might increase the risk of money laundering and terror financing. “This would include consideration of the risks posed by non-cash – for example, crypto currency-based – transactions,” a spokesperson from the ministry said.

“Therefore, businesses which choose to accept cryptocurrency payments should ensure that they have sufficient measures in place to mitigate potential money laundering and terrorism financing risks, which may arise from these modes of payment. In addition, businesses should perform their due diligence before accepting cryptocurrency payments, as cryptocurrencies are not legal tender.”

Rising Concerns

The Singaporean authorities have been concerned about illegal transactions in the precious stones market for a while. Last week, the ministry introduced a bill to tighten money laundering and terrorism financing rules in the precious stones and metals industry. The bill also covered the concerns with the digital asset payments and proposed a complete framework for them.

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