Managing Operators and Protecting the Public in Potential Shake-up in Banking System

Miss Cheryl Chan Wei Ling asked the Prime Minister in light of Facebook's plans to introduce the Libra cryptocurrency, whether he will consider introducing regulatory changes to manage a potential shake-up in the banking system and to protect the public from the perspectives of market competitiveness and data privacy.

Libra is, according to Facebook, a new digital currency aimed at lowering the cost of payments, and bringing the unbanked into the financial system. Facebook plans to launch Libra with an association of technology companies, including partners such as PayPal, Uber and Visa.

At this point, however, we do not have details as to how the Libra Association plans to implement its solution. It is in the early stages of development, with a number of issues to be worked out around its features, use cases, and governance arrangements. Like other regulators around the world, MAS will make an informed assessment of the potential benefits and risks of Libra once these details become clear.

Singapore now has a relatively developed ecosystem of e-wallets and bank apps that allow for secure, convenient, and efficient domestic payments and transfers. Even so, we are open to further innovations, particularly if they can bring about additional benefits without undermining the stability and integrity of the financial system.

Miss Chan asked whether regulatory changes will be considered in response to Libra. The Payment Services Act (PS Act) was introduced to provide new and innovative payment products and services with regulatory certainty. The Act covers cryptocurrencies, or digital payment tokens (DPT) as we would call it, as well as e-money, and domestic and cross-border fund transfers. Depending on its nature, Libra may be regulated under the PS Act, and be subject to requirements on anti-money laundering and countering the financing of terrorism imposed under the MAS Act. As for personal data privacy, all entities operating in Singapore that collect personal data are subject to the requirements of the Personal Data Protection Act.

MAS will continue to engage Facebook on its plans for Libra, and consider appropriate regulatory responses once they are clear.