Singapore seeks to cement itself as a global cryptocurrency hub
- Monetary Authority of Singapore MD Ravi Menon said the city state risked being left behind by not getting a head start in how to handle cryptocurrency
- ‘Strong regulation’ is being put in place and 170 companies have applied for a licence, with only three, including DBS Holdings, receiving one
“We think the best approach is not to clamp down or ban these things,” said Ravi Menon, managing director of the Monetary Authority of Singapore, which regulates banks and financial firms.
Instead, MAS is putting in place “strong regulation” so firms that meet its requirements and address the multitude of risks can operate, he said.
Nations differ vastly when it comes to how they handle cryptocurrency: China has cracked down on large amounts of activity in recent months, Japan only recently allowed dedicated cryptocurrency investment funds – though El Salvador has embraced bitcoin as legal tender. In the US, while there are an abundance of options for investing in the burgeoning asset class, regulators are concerned about everything from stablecoins to yield-generating products.
“With cryptocurrency-based activities, it is basically an investment in a prospective future, the shape of which is not clear at this point,” said Menon, who has helmed the MAS for about a decade. “But not to get into this game, I think risks Singapore being left behind. Getting early into that game means we can have a head start, and better understand its potential benefits as well as its risks.”
The stakes are high for the small island nation, which has already earned a reputation as a global wealth hub. Singapore must raise its safeguards to counter risks including illicit flows, Menon said.