Image Source: iStock/MasterLu
DigiFT, a decentralized exchange for digital assets, has obtained a capital markets services (CMS) license from the Monetary Authority of Singapore (MAS).
The license allows DigiFT to engage in capital markets activities, including dealing in securities and units of collective investment schemes through tokens, the company said in a Monday press release.
In addition to the CMS license, DigiFT has also been recognized by MAS as a market operator, granting the exchange the ability to operate an organized market for secondary trading of security tokens on the public blockchain.
“Securing both the CMS licence and RMO recognition is a significant milestone in our journey to enable regulated access to financial opportunities on-chain,” Henry Zhang, founder and CEO of DigiFT, said in a comment.
“As the first exchange on the public blockchain to use an AMM mechanism for secondary trading, we will continue to unlock innovations, as a RMO, in the intersection of finance and blockchain technology, including the tokenisation of real-world assets.”
DigiFT Offers Secondary Trading for Security Tokens
DigiFT’s platform, which is built on the Ethereum blockchain, offers secondary trading liquidity for security tokens through an automatic market-making mechanism.
The tokens traded on DigiFT are backed by real-world assets such as bonds, equities, and collective investment schemes.
With the CMS license in place, DigiFT plans to introduce a wider range of tokenized real-world assets and Web3 assets, further expanding its offerings to users.
Established in 2021, DigiFT is the first and only decentralized exchange with an automatic market-making mechanism to be enrolled in the MAS fintech regulatory sandbox.
This regulatory sandbox allows innovative fintech companies to test their solutions in a controlled environment, fostering technological advancements in the financial industry.
Looking ahead, DigiFT aims to expand its app’s availability in different regions while enhancing the user experience by introducing more user-friendly features.
Singapore Pushes For Crypto Regulations
Singapore has been actively engaging with global financial authorities in the realm of digital currencies.
In September 2023, MAS successfully completed a joint test of cross-border trading and settlement of wholesale central bank digital currencies in collaboration with the Bank for International Settlements and the central banks of France and Switzerland.
Back in July, Singapore also revealed plans to impose a trust requirement on cryptocurrency exchanges in a bid to instill confidence in the market and protect investors from potential losses.
At the time, the MAS stated that cryptocurrency exchanges would be required to keep customer assets in a trust.
The new regulation is expected to be implemented before the end of the year.
Additionally, Singapore will proceed with its proposal to ban lending and staking for retail investors.
The MAS initiated a consultation on these measures in October last year, just before the FTX debacle. The aim of the consultation was to enhance Singapore’s regulatory framework for digital assets.
The MAS emphasized that although regulations play a crucial role in safeguarding consumers, traders must exercise caution due to the high risk and speculative nature of digital payment token trading.
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