Singapore Flags Higher Terrorism Financing Risk for Digital Payment Token Services

digital payment Monetary Authority of Singapore Singapore
Ad Disclosure
Ad Disclosure

We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. However, this potential compensation never influences our analysis, opinions, or reviews. Our editorial content is created independently of our marketing partnerships, and our ratings are based solely on our established evaluation criteria. Read More
Last updated:
Ad Disclosure
Ad Disclosure

We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. However, this potential compensation never influences our analysis, opinions, or reviews. Our editorial content is created independently of our marketing partnerships, and our ratings are based solely on our established evaluation criteria. Read More
Crypto Reporter
Crypto Reporter
Shalini Nagarajan
Author Categories
About Author

Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Ad DisclosureWe believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. Read more

Singapore has raised the risk level for digital payment token (DPT) service providers potentially facilitating terrorism financing (TF) from “medium-low” to “medium-high” in its latest update to the terrorism financing national risk assessment.

The Ministry of Home Affairs, Ministry of Finance, and Monetary Authority of Singapore jointly announced on Monday that the latest risk assessment, last conducted in 2020, identified comparable areas of terrorism financing risk.

However, the report also admitted a lack of clear evidence for widespread use of digital payment tokens in Southeast Asia. This might be due to limited technology in areas hit by terrorism, lacking both financial infrastructure and good internet.

DPT service providers include companies that deal in digital currencies.

Singapore Digital Token

Why Digital Tokens Makes Terrorist Financing Harder to Stop

Even though traditional currencies are still the main way terrorists finance their activities, experts around the world are increasingly worried about virtual currencies like Bitcoin being used for this purpose. This concern has grown especially since the COVID-19 pandemic. The authorities in Singapore are closely watching this situation as virtual currencies become more popular.

“While there are no known domestic TF cases involving DPTs, Singapore is cognisant of the higher TF risks originating from the increasing presence of DPT service providers,” the report said.

There are several reasons terrorism financing is a concern for DPTs. First, these transactions are often anonymous, fast, and can happen across borders, making it difficult to track. Second, there’s a risk that even licensed companies in Singapore might do business with unlicensed ones overseas, which could be more vulnerable to misuse.

Finally, not all countries have implemented the same rules for tracking these transactions, creating gaps that terrorists could exploit.

Also, features like anonymity tools and privacy coins make it difficult to track who is sending and receiving money, as well as where they are located. Additionally, these currencies allow for quick and easy transfer of funds across borders, making them a more efficient way for terrorists to move large sums of money compared to traditional methods.

However, this very anonymity and ease of use also creates significant challenges for law enforcement agencies trying to track terrorist financing through digital currencies.

Singapore Prioritizes Combating Money Laundering in Banks and Digital Token Services

Singapore’s assessment found that banks

, especially those dealing with wealth management, are most at risk for money laundering. This is because banks handle large sums of money and often serve clients who might be more likely to engage in illegal activities.

Beyond banks, Singapore’s assessment also identified payment companies that handle international money transfers and investment firms managing external assets as areas of concern for money laundering.

Back in April, Singapore’s financial regulator took action to address these money laundering risks. It announced changes to the Payment Services Act, which will give the agency more control over companies dealing in digital currencies.

More Articles

Altcoin News
Gold-Backed Altcoins Boom as Major Banks Raise Price Predictions: Which Coins to Get
Arslan Butt
Arslan Butt
2025-02-09 12:55:24
Altcoin News
Coinbase Holds Over $420 Billion in Digital Assets for Users, Exceeding 21st Largest US Bank
Ruholamin Haqshanas
Ruholamin Haqshanas
2025-02-09 12:28:56
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors