FinTech Laws in Asia
FinTech Lawyers and DeFi Attorneys work on due diligence projects and legal opinion letters for blockchain projects. In recent years, the region has begun to see an explosion in FinTech companies, but the regulation in many countries can be confusing. The MAS and Enterprise Singapore are the main regulatory bodies in the region, and the Moneylenders Act regulates the moneylending business. The Philippines and Thailand have not yet signed the Memorandum of Cooperation between their governments or signed the APEC FinTech Funds Passport negotiations.
While the regulatory framework in most countries is fairly flexible, it will take time to implement. The current timeframe for implementing new regulations in Asia is two to three years. In the meantime, many companies are unable to launch their services in the region due to regulatory gaps. The MAS has taken action against some errant FinTech players, penalizing them in virtual money. Additionally, it has imposed strict rules on digital token exchanges, such as those of Coincheck. In May 2018, the MAS issued warnings to eight digital token exchanges in the country for facilitating trading in deemed securities and futures contracts.
Regulatory fragmentation is another reason for the low level of mutual recognition of licensing requirements. As a result, most ASEAN countries restrict foreign entities from offering financial services to consumers. For example, in Indonesia, all e-money operators must be 49% foreign-owned. In Thailand, a recent decree on digital assets businesses restricts foreign ownership of e-money operators. In Singapore, the Payment Services Act (PSA) requires platform operators to check the affordability of their customers. In addition to the lack of mutual recognition of licensing requirements, many ASEAN nations restrict foreign entities from providing financial services. In Indonesia, all e-money operators must be 49% foreign-owned. In Thailand, the 2018 Payment Services Act also limits foreign ownership in the sector. These are just some of the major challenges in the region. There are more than a few challenges ahead. But, with the continued development of the fintech industry in the region, the future is bright.
Singapore’s MAS has outlined its principles for FinTech regulation. It has indicated that it is not appropriate to “front run” innovation and has established numerous co-operation agreements with its foreign counterparts to monitor emerging FinTech activities. In Singapore, the MAS monitors and enforces the FinTech landscape, and makes changes as necessary. This is especially true in the case of the Monetary Authority of Singapore, as the regulatory body has the authority to regulate the sector. In Singapore, FinTech companies are regulated by the MAS. MAS regulates the financial services industry in the country. Its statutory legislation governs various aspects of financial institutions, including data security and privacy. The ICOs are often regulated by the MAS. This is why they are required to comply with such regulations. However, in Asia, the MAS has not yet been fully effective in regulating the FinTech industry. Within Asia Pacific, role of Fintech Attorneys and Decentralized Finance or DeFi lawyers includes FinTech or DeFi due diligence and writing DeFi legal opinion letters or Fintech legal opinion letters.
In Singapore, the MAS is responsible for regulating the financial sector and managing risks. In particular, Singapore is a leader in FinTech. Despite its success, Singapore is also a global financial center. The MAS regulates the financial sector in the country and is particularly concerned with cybersecurity. The MAS has recently signed agreements with several foreign regulators to regulate the industry and prevent cybercrime. Further, the MAS has a strong cybersecurity law in Singapore. The regulatory landscape in the region is evolving rapidly. While there are many differences between countries, overlapping national regulations can lead to a disproportionately high level of compliance costs and delays in implementing new technologies. By following these guidelines, Asian regulators will ensure that financial services remain competitive and safe. There will be more innovation in the region in FinTech and the industry is likely to grow exponentially. If this trend continues, the region will continue to thrive in the future. Regulatory issues in Asia are growing rapidly. China is the most important market for FinTech and is a burgeoning global marketplace. While the region is diverse and dynamic, it is a crucial part of the world. But, as with any industry, regulations are constantly changing. This can affect businesses in any part of the region. Consequently, it is imperative to stay abreast of the latest developments in the region to stay on top of local laws.
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Advocate Rahul Dev is a Patent Attorney & International Business Lawyer practicing Technology, Intellectual Property & Corporate Laws. He is reachable at rd (at) patentbusinesslawyer (dot) com & @rdpatentlawyer on Twitter.
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