1 Legal and enforcement framework

1.1 What general regulatory regimes and issues should blockchain developers consider when building the governance framework for the operation of blockchain/distributed ledger technology protocols?

Foremost, core blockchain developers of blockchain/distributed ledger technology protocols should assess whether it is necessary or appropriate to set up a legal entity (if any) for the purposes of their business operations. In Singapore, the typical choice would be to set up a private limited company, which can be done affordably and easily online at the website of the Accounting and Corporate Regulatory Authority ("ACRA").

Especially in the context of operating a centralised blockchain/distributed ledger technology protocol, blockchain developers should consider whether their proposed business model involves the conduct of certain regulated activities which give rise to licensing and/or prospectus registration obligations under the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), and/or licensing obligations under the Payment Services Act 2019 (the "PSA"). To cite common industry examples, these obligations often arise out of the operation of a cryptocurrency exchange, and/or the issuance or dealing in "security tokens".

Blockchain developers should also bear in mind the general obligations that are imposed under anti-money-laundering and countering the financing of terrorism laws and regulations (e.g. the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, Chapter 65A of Singapore, the Terrorism (Suppression of Financing) Act, Chapter 325 of Singapore, and the relevant United Nations regulations).

1.2 How do the foregoing considerations differ for public and private blockchains?

The same considerations apply.

1.3 What general regulatory issues should users of a blockchain application consider when using a particular blockchain/distributed ledger protocol?

Generally, an end user would likely encounter the effects of anti-money laundering and countering the financing of terrorism ("AML/CFT") and personal data protection obligations of the service provider.

This may include having to participate in know-your-client ("KYC") procedures such as taking a selfie with photo identification and a note stipulating the present date, as well as consenting to the collection, use and disclosure of other personal data. An end user may also encounter usage limitations, e.g. wallet size and/or transfer limitations, which are an indirect result of AML/CFT obligations that the services provider has to comply with.

Under the Personal Data Protection Act 2012 (the "PDPA"), an end user may request:

  • to be provided his or her personal data that is in the possession or under control of that organisation as well as information on the ways in which such data has been used within the year before the request; or
  • a correction of an error or omission in his or her personal data.

It may be difficult or impossible for end users to exercise or enforce these rights where there is no identifiable organisation operating providing the service, or where the identifiable organisation is operating outside of Singapore. Users should therefore exercise caution in the amount of funds they commit to a blockchain application, and what personal data they disclose. In addition, end users may want to look into whether the relevant service provider possesses the requisite licence to operate, so as to avoid the risk of dealing with an entity conducting illegal operations.

1.4 Which administrative bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?

The Monetary Authority of Singapore (the "MAS") has broad oversight over the financial services sector and is responsible for enforcing the SFA and the PSA. It has the power to impose regulation, monitor compliance, and enforce against breaches under these acts.

The Personal Data Protection Commission of Singapore (the "PDPC") serves as Singapore's main authority in matters relating to personal data protection and is responsible for enforcing the PDPA. It may enforce against organisations for breaches of the PDPA. However, the PDPC may have limited effect against to public blockchains/distributed ledger protocols that are not operated by an identifiable entity within the jurisdiction of Singapore.

The Commercial Affairs Department of the Singapore Police Force (the "CAD") is generally responsible for enforcing the anti-money-laundering and counter-terrorist financing regime in Singapore. In addition, if an entity is regulated by the MAS (e.g. under the SFA or the PSA), it may be required to comply with additional AML/CFT regulations prescribed and enforced by the MAS.

1.5 What is the regulators' general approach to blockchain?

The regulators, especially the MAS, are generally well apprised of issues relating to blockchain. It may be helpful to refer to a speech, "Crypto Tokens: The Good, the Bad and the Ugly" by Ravi Menon, Managing Director, MAS, dated 15 March 2018 (https://www.mas.gov.sg/news/speeches/2018/crypto-tokens-the-good-the-bad-and-the-ugly) which provides the thinking underlying the approach MAS has taken toward regulating the blockchain space.

Broadly, the MAS has taken the approach where certain regulatory issues are already addressed by existing laws and regulations, such laws and regulations apply no differently. For instance, in a Guide to Digital Token Offerings published by the MAS, dated 23 December 2019, the MAS states that "[o]ffers or issues of digital tokens may be regulated by the MAS if the digital tokens are capital markets products under the SFA".

In contrast, the PSA was not only created to streamline the regulation of certain existing payment services (such as money changing, remittance and stored value facilities) into a single piece of legislation, it was also created to addresses new developments in the blockchain space such a e-money and account issuance services (e.g. digital goods wallets), and digital payment token services (e.g. cryptocurrency exchanges). The Singapore Government has therefore been quick to enact new legislation to address technology developments that have not yet already been covered by existing laws and regulations.

In fact, as part as the broader desire to position Singapore as a financial services hub on the global and regional stage, the Singapore Government has been exploring the use of distributed ledger technology, including blockchains to offer better products to the market. For example, the MAS has been exploring the use of distributed ledger technology for the clearance and settlement of payments and securities since 2016 with the inception of Project Ubin.

1.6 Are any industry or trade associations influential in the blockchain space?

ACCESS, Singapore Cryptocurrency and the Blockchain Industry Association.

2 Blockchain market

2.1 Which blockchain applications and protocols have become most embedded in your jurisdiction?

  • Ethereum: Beyond private enterprises and private blockchains, the Singapore government is itself utilising the Ethereum network. For example, the Government Technology Agency, the Ministry of Education, Ngee Ann Polytechnic and SkillsFuture Singapore have jointly developed the OpenCerts platform, which uses Ethereum smart contracts to issue and validate digital certificates of graduates of local educational institutions.
  • Hyperledger, Corda and Quorum: In Phase 2 of Project Ubin, the MAS explored the use of these three protocols for operating an interbank real-time gross settlement system and successfully developed working implementations.

2.2 What potential new applications/protocols are most actively being explored?

  • The provision of payment services;
  • the use of blockchain/distributed ledger technology for the issuance and trading of securities;
  • logistics and supply chain tracking; and
  • authenticity verification.

2.3 Which industries within your jurisdiction are making material investments within the blockchain space?

  • Financial services;
  • logistics and supply chain; and
  • trade financing.

2.4 Are any initiatives or governmental programmes in place to incentivise blockchain development in your jurisdiction?

The Singapore government actively encourages blockchain development – for example:

  • the Infocomm Media Development Authority (the "IMDA") has organised two editions of its Blockchain Challenge, challenging participants to solve industry-facing challenges. Past selected projects include those by ConsenSys and Zilliqa; and
  • the IMDA has also selected TRIVE Venture Capital Pte Ltd to be its industry partner for putting in place a blockchain ecosystem engagement platform.

3 Cryptocurrencies

3.1 How are cryptocurrencies and/or virtual currencies defined and regulated in your jurisdiction?

There is no legal definition of ‘cryptocurrencies' and/or ‘virtual currencies'.

In general, cryptocurrencies and/or virtual currencies may fall within the definition of one or more of:

  • a ‘capital markets product' under the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), defined as any securities, units in a collective investment scheme, derivatives contracts, spot foreign exchange contracts for the purposes of leveraged foreign exchange trading or other products prescribed by the MAS;
  • ‘e-money' under the the Payment Services Act 2019 (the "PSA"), defined as any electronically stored monetary value that:
    • is denominated in any currency or pegged by its issuer to any currency;
    • has been paid for in advance to enable the making of payment transactions through the use of a payment account;
    • is accepted by a person other than its issuer; and
    • represents a claim on its issuer; and/or
  • a ‘digital payment token' under the PSA, defined as any digital representation of value that: :
    • is expressed as a unit;
    • is not denominated in any currency and is not pegged by its issuer to any currency;
    • is, or is intended to be, a medium of exchange accepted by the public, or a section of the public, as payment for goods or services or for the discharge of a debt; and
    • can be transferred, stored or traded electronically; and
    • satisfies such other characteristics as the Monetary Authority of Singapore (the "MAS") may prescribe.

Therefore, depending on the nature of the cryptocurrency and whether it falls within one or more of the categories above, the corresponding legislation would apply. For example, the issuance and/or dealing in a cryptocurrency which is a ‘capital markets product' would likely give rise to licensing and/or prospectus registration obligations under the SFA, while the dealing in or facilitating the exchange of a cryptocurrency that is a ‘digital payment tokens' would likely give rise to licensing obligations under the PSA.

3.2 What anti-money laundering provisions apply to cryptocurrencies?

Depending on how the relevant entity is regulated, e.g. as a capital markets service provider under the SFA, or a payment services provider under the PSA, such entity would have to comply with the relevant anti-money laundering and countering the financing of terrorism ("AML/CFT") notices issued by the MAS.

The general AML/CFT obligations under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, Chapter 65A of Singapore, the Terrorism (Suppression of Financing) Act, Chapter 325 of Singapore, and the relevant United Nations regulations) will also apply.

3.3 What consumer protection provisions apply to cryptocurrencies?

Generally, the MAS has forewarned in a media release dated 19 December 2017 that there is a high degree of risk when dealing with cryptocurrencies. In particular, many operators of platforms that deal in cryptocurrencies do not have a presence in Singapore, which makes it difficult to verify their authenticity or credibility, and there is greater risk of fraud when investors deal with entities whose backgrounds and operations cannot be easily verified. Further, if a cryptocurrency intermediary is found to have used cryptocurrencies illegally, its operations could be abruptly shut down by law enforcement agencies. There is also a risk that a cryptocurrency intermediary may be the target of cyber hacking, which may result in loss if personal funds or digital tokens are held by such an intermediary.

However, it should be noted that the general consumer protections do apply under the Consumer Protection (Fair Trading) Act, Chapter 52A of Singapore, as well as the usual claims under contract and tort law.

3.4 How are cryptocurrencies treated from a tax perspective?

Tax resident individuals in Singapore would be happy to note that there is no capital gains tax applicable in Singapore, and therefore there is no need for onerous accounting for the purposes of cryptocurrency investment.

Businesses that choose to accept cryptocurrencies are subject to normal income tax rules. Therefore, such businesses will be taxed on the income that is derived from or received in Singapore. Where businesses use or accept cryptocurrencies as payment for goods and services, they should record the sale or purchase based on the open market value of the goods or services in Singapore dollars or, if such value cannot be determined, then based on the rate of exchange of the cryptocurrency at the time of the transaction.

Businesses that derive a profit from buying and selling, or mining and trading, cryptocurrencies will be taxed on such profits. The distinction between trading and capital gains will depend on the specific factual matrix of each case. Broadly speaking, an entity may be considered carrying on the business of a certain activity if it does so with sufficient system, repetition and continuity, regardless of whether there is any profit.

3.5 What regulatory requirements apply to a cryptocurrency trader/exchange?

There are no regulatory requirements for persons trading in their personal capacity.

The regulatory requirements for a cryptocurrency exchange will depend on whether the cryptocurrencies available for trading may be construed to be ‘capital markets products' under the SFA or ‘digital payment tokens' under the PSA. Other regulatory requirements may also apply if the cryptocurrency in question bears characteristics of other regulated instruments. For example, if a cryptocurrency represents an underlying commodity and physical delivery is due as a result of a trade, this may be construed as ‘spot commodity trading' under the Commodity Trading Act, Chapter 48A of Singapore.

Consequently, if a cryptocurrency exchange makes available for trading cryptocurrencies that are construed to be ‘capital markets products' under the SFA, or carries on the business of dealing in such ‘capital markets products', it will likely need to be approved or recognised as an exchange or market operator, respectively, or licensed as a capital markets service provider with the MAS. If a cryptocurrency exchange makes available for trading cryptocurrencies that are construed to be ‘digital payment tokens' under the PSA, it will likely need to be licensed as a digital payment token services provider with the MAS.

In relation to AML/CFT obligations, an MAS regulated entity would have to comply with the specific AML/CFT notices issued by the MAS. General AML/CFT obligations under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, Chapter 65A of Singapore, the Terrorism (Suppression of Financing) Act, Chapter 325 of Singapore, and the relevant United Nations regulations) would also apply.

3.6 How are initial coin offerings and securities token offerings defined and regulated in your jurisdiction?

Foremost, note that there is no statutory definition of ‘initial coin offerings' or ‘securities token offerings' under Singapore law.

It should also be noted that the category of ‘capital markets products', being regulated financial instruments in Singapore, is not limited to ‘securities' (which refer, broadly speaking, to equity and debt instruments only). Units in a collective investment scheme, or derivatives contracts, also fall within the category of ‘capital markets products', which are also regulated financial instruments. Accordingly, although the colloquial industry term, ‘security token offering' is often used, it should be noted that an offering of units in a collective investment scheme or securities-based derivative contracts (i.e. not only ‘securities') in Singapore would also be regulated as an offer of investment under the SFA, which would likely give rise to prospectus registration and/or licensing obligations under the SFA.

It follows, therefore, if an ‘initial coin offering' (in contrast to a ‘security token offering') relates to the issuance of a digital token that is not a ‘capital markets product' under the SFA, the SFA will not apply. A common example of this would be ‘utility tokens', which are digital tokens that can be used to exchange for certain goods and services.

Regardless of the nature of the offering, the general AML/CFT obligations under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, Chapter 65A of Singapore, the Terrorism (Suppression of Financing) Act, Chapter 325 of Singapore, and the relevant United Nations regulations) will also apply.

4 Smart contracts

4.1 Can a smart contract satisfy the legal requirements of a legal contract under the laws of your jurisdiction? What will be considered when making this determination?

Foremost, it should be noted that a smart contract tends to be a bit of a misnomer, in that it strictly refers to a piece of computer code that allows for the automation of a certain transaction to take place. It is a ‘contract' insofar as the potential transaction is hard-coded, and therefore binding once the requisite conditions are met for such a transaction to take place. Accordingly, whether a smart contract also happens to be a legal contract, depends on whether the necessary elements for a legal contract exist.

In this respect, the courts will look at, among other things, the existence of the following elements:

  • offer and acceptance;
  • intention to create legal relations;
  • consideration; and
  • certainty of terms.

This approach has also been generally affirmed in the Consultation Paper on the Review of the ETA, dated 27 June 2019 (the "Review of ETA Consultation Paper"), wherein the Infocomm Media Development Authority ("IMDA") stated that the Electronic Transactions Act, Chapter 88 of Singapore (the "ETA") does not prevent the use and formation of smart contracts, and a contract formed is unlikely to be denied validity or enforceability by sole virtue of its automatic formation.

There are currently no case authorities on whether a smart contract satisfies the legal requirements of a legal contract in Singapore law.

4.2 Are there any regulatory or governmental guidelines or policies within your jurisdiction which provide guidance on regulating/defining smart contracts?

There is no statutory definition of a ‘smart contract' under Singapore law.

In the Review of ETA Consultation Paper, the IMDA stated that the ETA does not prevent the use and formation of smart contracts, and a contract formed is unlikely to be denied validity or enforceability by sole virtue of its automatic formation. Further, the IMDA has stated that "it may be possible for the cryptographic hash to be considered as an electronic signature, or at least form a possible component of an electronic signature", depending on the specific technical implementation, and therefore may be used to demonstrate the intention of a party (e.g. acceptance) and authenticate the party involved. Separately, the IMDA also noted that the concept of secure electronic signature may be inapplicable for anonymous or pseudonymous blockchains because the digital signature created by users would not be capable of identifying the person who created such signatures.

4.3 What parts of traditional contract might smart contracts be able to replace?

Smart contracts can complement traditional contracts in the execution of certain deterministic contractual terms that involve information capable of residing on-chain. An example is the use of smart contracts to automate payments in virtual currency from one party to another when certain hard-coded, objective conditions are met.

4.4 What parts of traditional contracts might smart contracts be unable to replace?

Among other things, smart contracts are unlikely to be capable of replacing the subjective elements of a legal contract. For example, whether goods supplied are of ‘good' or ‘bad' quality, or whether ‘reasonable endeavours' have in fact been undertaken in respect of a certain obligation.

Therefore, while smart contracts may be able to replace the simplest of legal contracts, the presence of subjective elements in most slightly more complex contracts make it difficult for smart contracts to do the same. Such contracts would likely require an extrinsic input post-contract formation, for instance, a third-party assessor who determines that goods delivered are of ‘good' quality would have to submit an input indicating such, before the smart contract can be fully executed.

4.5 What issues might present themselves in your jurisdiction with regard to judicial enforcement of smart contracts?

Aside from the issue of whether a smart contract represents a legally binding contract, another practical issue with the enforcement of smart contracts is whether the parties to the transaction may be identified given the anonymous or pseudonymous nature of smart contract transactions on public blockchains. This issue was recognised by the IMDA in the Review of ETA Consultation Paper.

4.6 What are some practical considerations that parties should consider when drafting a smart contract?

Parties should identify the elements of the traditional contract that are suitable for execution by smart contracts and limit the scope of the smart contracts to these elements. A smart contract and traditional contract can therefore complement each other to make up the whole contract.

Parties should also consider expressly allocating the risks specific to the use of smart contracts. For example, such risks may include a bug or error in the smart contract that is subsequently exploited by malicious persons, resulting in losses to a party.

Where a traditional contract is already in place, parties should ensure that the smart contract(s) is consistent with the terms of the traditional contract.

4.7 How will the foregoing considerations differ when smart contracts are running on a private versus public blockchain?

A key difference would be that private blockchains tend to have identifiable parties entering into a smart contract, while a public blockchain may have unidentifiable anonymous or pseudonymous parties involved. Accordingly, this obstacle tends not apply in the context of a private blockchain.

5 Data and privacy

5.1 What specific challenges or concerns does blockchain present from a data protection/privacy perspective?

The main challenge arises from the potential immutability of blockchains, especially public blockchains. For example, this feature may be incompatible with an organisation's obligation to cease retention of personal data in certain circumstances. Developers should therefore carefully consider the type of data that they intend to store on-chain and off-chain.

5.2 What potential advantages can blockchain offer in the data protection/privacy context?

Foremost, blockchain may enable users to exercise greater control over their personal data through the use of cryptographic keys and signatures to control access.

On 22 May 2019, the Personal Data Protection Commission (the "PDPC"), in collaboration with the Consumer Commission of Singapore, launched a public consultation for the introduction of a data portability requirement under the Personal Data Protection Act 2012 (the "PDPA"). Data portability gives individuals greater control over their personal data by allowing them to request for their data held by an organisation to be transmitted to another organisation in a commonly used machine-readable format. This will enable individuals to move their data across services and enable greater access to more data by organisations.

In its response to feedback dated 20 January 2020, the PDPC stated that it intends to introduce such a data portability requirement under the PDPA, as this would facilitate movement of consumer data from one service provider to another, thus empowering consumers to try out or move to new or competing service offerings by other service providers. In this respect, blockchain has the potential to facilitate the technological implementation of data portability, which seeks to allow individuals to move, copy or transfer personal data easily from one organisation to another.

6 Cybersecurity

6.1 What specific challenges or concerns does blockchain present from a cybersecurity perspective?

While a robust blockchain may not present challenges or concerns from a cybersecurity perspective, there may nonetheless be cybersecurity risk involving the custody of digital assets by centralised parties such as exchanges and digital assets custodians. A lapse in operation security in these entities can result in successful cyber hacking attempts that lead to loss of funds and assets. For example, while Bitcoin network itself has yet to be hacked, Bitcoin exchanges have been hacked, causing the loss of funds for users in such exchanges.

Where a blockchain trades a certain degree of robustness for greater utility (such as ones that allow for the use of smart contracts), the use of such smart contracts may present a cybersecurity risk in the form of bugs or errors in code which can be exploited by malicious actors. A famous example would the DAO attack on the Ethereum network where Ether valued at around US$50 million (at the time) was lost.

6.2 What potential advantages can blockchain offer in the cybersecurity context?

Blockchain can be employed to address cybersecurity risks. For example, decentralised file storage may overcome the shortcoming of centralised data servers as a single point of failure. However, it is important to consider the implications of other regulations such as those relating to personal data, and those relating to geographical restrictions on data flows.

6.3 What tools and measures could be implemented to mitigate cybersecurity risk?

In Singapore, entities licensed by the Monetary Authority of Singapore (the "MAS") are expected to comply with certain cyber hygiene and technology risk management obligations and guidelines. These include general obligations and guidelines that apply across the board to all licensed entities, or specific to certain types of licensed entities (e.g. capital markets service providers or payment service providers).

Examples of tools and measures that can be implemented to mitigate cybersecurity risk may include, but are not limited to:

  • having in place a written set of cybersecurity standards in place for every system;
  • ensuring the regular implementation of security patches;
  • having in place a network perimeter defence;
  • having in place adequate malware protection;
  • implementing the use of multi-factor authentication;
  • having in place a disaster recovery plan; and
  • the regular conduct of vulnerability assessment and penetration testing.

7 Intellectual property

7.1 What specific challenges or concerns does blockchain present from an IP perspective?

The code of public blockchains tends to be incompatible with copyright protection because it is usually available as open source software to encourage development and adoption.

In addition, the open source nature of public blockchains has resulted in significant research and ideas being posted on community forums and platforms, which may constitute prior art for the purposes of a patent application.

7.2 What type of IP protection can blockchain developers obtain?

Blockchain developers may apply for patents. They may also obtain copyright without any requirement for registration.

7.3 What are the best open-source platforms that could be used to protect developers' innovations?

Not applicable.

7.4 What potential advantages can blockchain offer in the IP context?

Blockchain may potentially offer several advantages in the registration, protection and management of intellectual property. For example, the immutability property of blockchains may be employed to prove registration, provenance and creatorship, or track ownership. Another example is the use of smart contracts on blockchain to automate payments in a licensing agreement.

8 Trends and predictions

8.1 How do you think the regulatory landscape in your jurisdiction will evolve in the blockchain space over the next two years? Are any pending changes currently being considered?

Although the Payment Services Act 2019 (the "PSA") came into force only in January 2020, the Monetary Authority of Singapore (the "MAS") has already signalled in a consultation paper dated 23 December 2019 that it will be expanding the scope of intermediaries that will be caught under the PSA to align with the Financial Action Task Force's (the "FATF") position. Such intermediaries currently include service providers that (i) facilitate the transfer of ‘digital payment tokens'; (ii) offer custodial wallet services; and (iii) broker ‘digital payment tokens' transactions without coming into possession of money or ‘digital payment tokens'.

Further, the MAS has also consulted on the regulatory treatment of stablecoins under the PSA, specifically the issue of whether they should be classified as ‘e-money' or ‘digital payment tokens'. It is therefore likely that there will be greater certainty surrounding the regulation of stablecoins over the next two years.

Separately, the Infocomm Media Development Authority (the "IMDA") is also reviewing the Electronic Transactions Act, Chapter 88 of Singapore (the "ETA") and its impact on transactions conducted on blockchains or smart contracts.

In terms of regulatory posture, we have yet to see any change to the MAS' approach, which has been to embrace new developments in the financial services sector (including the use of blockchain), while ensuring that laws and regulations keep up to ensure adequate protection for the adoption of new technologies. This remains in line with the Singapore Government's broader desire to position Singapore as a financial services hub on the global and regional stage, remaining competitive by being at the forefront of innovation, whilst providing clear and unambiguous laws and regulations to ensure certainty in compliance.

8.2 What regulatory changes would you like your jurisdiction to implement to further advance the blockchain industry?

As the technology matures and decentralised autonomous organisations become more prevalent, there may be an increasing need to address their legal status and whether it is necessary to create a sui generis category of legal entity. This may be important as it affects issues of liability.

In addition, there may be a need to review whether existing legislation is agnostic to technology. For example, legislation that targets intermediaries may grow increasingly unfeasible in the context of blockchain, which reduces or eliminates the need for intermediaries, or decentralises the function of an intermediary to a large number of stakeholders.

8.3 What is the largest impediment within your jurisdiction to the adoption of blockchain technology?

For a time now, the largest impediment was the ability for blockchain companies and exchanges to obtain a bank account in Singapore. The key issue was with the local banks' concern that they would not be able to adequately control funds flow into and out of these bank accounts, and thus not be able to comply with their own anti-money laundering and countering the financing of terrorism ("AML/CFT") obligations.

Since then, as the introduction of the PSA now requires digital payment token service providers (which include cryptocurrency exchanges and intermediaries) to be licensed by the MAS and comply with certain AML/CFT obligations of their own, we expect that this would go a long way to allay the banks' concerns and grant them the confidence to go ahead and provide bank accounts to such licensed entities.

Aside from the point above, the perennial impediment would probably be one that applies to any technology innovation, where new products or services which are developed do not quite fall neatly within the existing framework of laws and regulations. For example, the issue with determining the nature and regulatory treatment of a stablecoin (and even within this, whether there would be a regulatory distinction between a stablecoin like USDT or DAI). It would therefore be a race for local regulators to quickly understanding each new product and service, and come up with adequate protections under the law to ensure safe adoption. On this front, the Singapore Government appears to be very competitive, and has been doing a comparatively good job.

9 Tips and traps

9.1 What are your top tips for effective use of blockchain technologies in your jurisdiction and what potential sticking points would you highlight?

The blockchain space is still a relatively new and unfortunately still quite widely misunderstood space. When seeking out a law firm as your first port of call, do pick a service provider that understands not just the law, but the industry and underlying technologies. It may be necessary to balance the pros and cons – a top, ‘brand name' law firm may lend some brand credence in an application to regulators, but may adopt a conservative or risk-averse position to protect its reputation; a lesser known law firm may not be as familiar to regulators, but may be more able to take more common-sense and business friendly positions. A ‘Goldilocks' sweet spot in between would likely be best, depending on the situation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.