Singapore's Law Ministry Warns Cryptocurrencies Aren't Legal Tender

Singapore’s Ministry of Law has recently warned that in the country cryptocurrencies aren’t seen as legal tender, and as such ordered businesses to do necessary due diligence before accepting cryptocurrency payments.

The move reportedly came after a chain of jewelry stored called SK Jewellery partnered with Singapore-based point-of-sale systems firm Bizkey Network, in order to start accepting cryptocurrency payments.

According to the Business Times, there were suspicious transactions involving SK Jewellery, which were associated with money laundering. These forced authorities to reiterate their stance on cryptocurrencies in the country. The precious stone business, on the other hand, believes it’s following the government regulations.

A spokesperson for the company was quoted as saying:

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.

The spokesperson added that SK Jewellery is looking to “partake in the growth story of the digital economy,” while avoiding exposing its business to the volatility seen in the cryptocurrency markets.

To celebrate the acceptance of cryptocurrency payments, the firm launched a week-long campaign until January 27, in which it gives customers who buy gold and diamond discounts between 10% and 20%, if they chose to pay with cryptocurrencies. According to Bizkey, the campaign has so far been a huge success. In the first three two hour flash sales, over S$30,000 were transacted.

Singapore’s Law Ministry, on the other hand, believes the move may increase the risk of money laundering and terrorism financing, over the risks of cryptocurrency-based transactions. A spokesperson from the ministry was quoted as saying:

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.

Earlier this month, the ministry reportedly introduced a bill to tighten terror financing and money laundering possibilities in the precious stones and metals industry, according to Finance Magnates.

As CryptoGlobe covered Singapore has last year revealed it was set to help local cryptocurrency startups get banking services, at a time in which crypto-related firms in various countries were seeing banks shutter their bank accounts.