Ravi Menon, the head of the Monetary Authority of Singapore (the country’s central bank), said the nation’s crypto regulations will include a “strict” licensing process. He believes strict rules could reshape the city-state as a global hub for digital assets.
MAS seeks balance in crypto regulations
Despite its growing popularity in recent years, the cryptocurrency sector remains a risky field for retail investors. This was warned by Ravi Menon –Managing Director of MAS– in a recent interview. He warned that bitcoin and altcoins could be used for money laundering and terrorist financing.
As such, local authorities must implement comprehensive rules in the market, providing security and clarity to society in general. Menon stated that Singapore has an ambition to become a global crypto hub, but in order to reach that goal, the licensing process must be “strict”:
“And it should be because we want to be a responsible global crypto hub with innovative players, but also strong risk management capabilities.”
Menon explained that the central bank of Singapore is willing to strike a balance between encouraging the fast-growing digital asset sector and imposing appropriate rules on it. The executive warned that people should be “familiar with the risks of money laundering and financing of terrorism.” That said, he believes it is not wise for retail investors to be “dabbling in cryptocurrencies.”
On the other hand, he opined that bitcoin and altcoins do not currently pose a threat to the nation’s financial network.
The Singapore Crypto Ecosystem
The Asian city-state is one of the most technologically advanced countries. As such, it is not surprising that digital assets are quite popular among its residents. A recent survey revealed that 43% of Singaporeans own cryptocurrencies, while 46% stated that they will invest in the market in 2022.
At the same time, the authorities are also predominantly positive about the asset class. Several months ago, Menon he claimed that financial regulators have no plans to ban crypto companies, but rather to implement “strong regulation” on them.
However, he rejected the possibility of Bitcoin becoming legal tender in Singapore as the asset cannot be classified as “real money”. The executive added that inexperienced investors should not deal with him due to his higher volatility:
“If you want to treat it like an investment asset, you better know what you’re doing, it’s not for the faint hearted because of the volatility.”
Earlier this year, the MAS urged local crypto businesses should not promote their services in public areas or interact with third parties, including social media influencers. They can only advertise on their own website, mobile apps or official social media accounts.
This month, the Parliament of Singapore issued another pattern. It stated that only digital asset service providers based in the country but operating on foreign soil will need to obtain a regulatory license.