Ravi Menon – the head of the Monetary Authority of Singapore (the country’s central bank) – said the nation’s crypto regulations will include a “stringent” licensing process. He believes strict rules could reshape the city-state as a global digital asset hub.
MAS Seeks the Balance on Crypto Regulations
Despite its rapidly-growing popularity in the last several years, the cryptocurrency sector remains a risky field for retail investors. That is what Ravi Menon – Managing Director of the MAS – warned in a recent interview. He cautioned that bitcoin and altcoins could be used for money laundering and terrorism financing.
As such, the local authorities must implement comprehensive rules on the market, providing safety and clarity to broad society. Menon stated that Singapore has the ambition to turn into a global crypto hub, but to reach that goal, the licensing process must be “stringent:”
“And it needs to be because we want to be a responsible global crypto hub with innovative players, but also with strong risk management capabilities.”
Menon explained that Singapore’s central bank is willing to find the balance between encouraging the fast-growing digital asset sector and imposing the appropriate rules on it. The executive alerted that individuals should be “familiar with money-laundering and terrorist financing risks.” That said, he thinks it is not wise for retail investors to be “dabbling in cryptocurrencies.”
On the other hand, he opined that bitcoin and the altcoins do not currently pose a threat to the nation’s financial network.
Singapore’s Crypto Ecosystem
The Asian city-state is one of the most high-tech advanced countries. As such, it is no wonder that digital assets are quite popular among its residents. A recent survey revealed that 43% of Singaporeans own cryptocurrencies, while 46% asserted they will invest in the market in 2022.
At the same time, the authorities are also predominantly positive about the asset class. A few months ago, Menon asserted that the financial regulators have no plans to ban crypto endeavors but rather implement a “strong regulation” on them.
Nonetheless, he rejected the possibility of bitcoin becoming legal tender in Singapore since the asset can not be classified as “real money.” The executive added that inexperienced investors should not deal with it due to its enhanced volatility:
“If you want to treat it as an investment asset, you’d better know what you are doing, it is not for the fainthearted because of the volatility.”
Earlier this year, the MAS urgent local crypto companies not to promote their services in public areas or engage with third parties, including social media influencers. They can only advertise on their own website, mobile applications, or official social media accounts.
This month, the Singaporean Parliament issued another guideline. It stated that only digital asset service providers based in the country but operating on foreign soil will be required to obtain a regulatory license.