Singapore, UK Boost Collaboration on Fintech

Singapore and the United Kingdom have enhanced their existing relationship in regard to Fintech development and utilization. The UK is the top western Fintech hub and Singapore represents the most robust Fintech center in Asia. The initiative was led by HM Treasury and the Monetary Authority of Singapore (MAS).

The discussion was jointly chaired by Deputy Managing Director (Markets and Development) of MAS, Leong Sing Chiong, and Director General (Financial Services) of HM Treasury (HMT), Gwyneth Nurse.

According to a joint statement, the two countries discussed collaboration opportunities in Fintech and sustainable finance. Developments in non-bank financial intermediation (NBFI), along with cross-border payments, were also a topic of interest.

A relationship between the two countries regarding finance has long been in place. Both sides were said to have reaffirmed their commitment to scaling financing in support of the net zero agenda.

Directly addressing Fintech and emerging digital financial services the UK and Singapore were said to have outlined the following issues:

Artificial intelligence (AI): The UK and Singapore discussed financial stability risks, cyber security risks, as well as supervisory considerations associated with the increased use of AI in the financial sector. Both countries agreed that international standards were key to facilitating innovation while managing risks to consumers, financial market stability and integrity, and explored areas for collaboration through international fora, such as IOSCO and FSB.

Cryptoassets (digital assets): The UK provided an update on its final proposals for creating the UK’s financial services regulatory regime for cryptoassets, under which the government will bring a number of cryptoasset activities, such as exchange, custody, and lending activities, into the regulatory perimeter for the first time. The UK also updated on its plans to regulate certain fiat-referenced stablecoins and create the environment for stablecoin issuers and service providers to operate and grow in the UK.

Central Bank Digital Currency (CBDC): The UK shared developments on progress following the publication of the “digital pound” consultation response paper on 25 January 2024, including a design phase which would be followed by a decision on whether to proceed with a retail CBDC. The UK also shared their thinking on wholesale payments, including on infrastructure supporting the settlement of tokenised transactions.

Tokenisation and distributed ledger technology (DLT): The UK and Singapore shared their respective projects and initiatives in tokenisation and DLT and agreed on the benefits of asset and fund tokenisation to the financial ecosystem, from broadened investor access to investment products to simplifying distribution and trading of such products digitally. As part of Project Guardian’s policymaker group, the UK Financial Conduct Authority (FCA) and MAS, together with the other policymakers [3] , aim to advance discussions on the regulatory treatment of digital assets. Both countries agreed to share learnings on how regulatory regimes could facilitate responsible innovation.

Regarding NBFI and Cross-Border Payment Connectivity:

  • The UK provided an update on recent developments to address risks in the NBFI sector. Both countries underlined the importance of enhancing authorities’ ability to monitor risks in NBFIs via better data gathering and sharing. They also agreed on the importance of finalising on-going international policy work on margining practices and NBFI leverage, and to subsequently implement agreed NBFI policies at domestic level. The UK and Singapore agreed to continue their collaboration to address vulnerabilities associated with NBFIs, including at IOSCO and the FSB.
  • The UK and Singapore reiterated their commitment to the G20’s Roadmap to Enhancing Cross-Border Payments, including the FSB’s priorities for this year as laid out in its most recent progress report. The BIS Innovation Hub Singapore Centre also shared the progress of Project Nexus [4] , a multilateral approach to connect domestic instant payment systems to improve the speed, cost, transparency and accessibility of cross-border payments.
  • The UK and Singapore renewed their commitment to engagement beyond the Dialogue through a series of roadmap engagements to explore further cooperation in sustainable finance and FinTech and innovation, ahead of the next Financial Dialogue due to be held in the UK in 2025.

This week two industry-led UK-Singapore business roundtables on Transition Planning (net zero) and Generative AI will take place on with participation by industry participants from both countries.

 


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