Singapore, already a significant global financial centre, is trying to become a cryptocurrency powerhouse as well. According to recent comments by the chairman of the city-central state’s banking institution, the city-state is looking to secure its position as a prominent player in the crypto field.
Singapore authorities are taking steps to solidify their position as a prominent participant in the crypto market, according to an official who has been at the helm of the Monetary Authority of Singapore (MAS) for a decade. It comes at a time when Singapore and other financial centres around the world are looking into methods to regulate the fast developing sector. According to Bloomberg, MAS managing director Ravi Menon stated:
“We think the best approach is not to clamp down or ban these things.”
The MAS is Singapore’s central banking authority, in charge of establishing rules for banks and financial institutions. The authority is currently attempting to implement “strong regulation” for cryptocurrency companies in order to allow those that meet its requirements and adequately address the whole range of associated risks to operate in the jurisdiction.
“With crypto-based activities, it is basically an investment in a prospective future, the shape of which is not clear at this point,” Menon took note. The CEO cautioned that if Singapore does not get involved in the field, it will be left behind. He went on to say:
“Getting early into that game means we can have a head start, and better understand its potential benefits as well as its risks.”
Ravi Menon underlined that Singapore must strengthen its protections to combat threats such as illicit flows. Simultaneously, the city-state is “engaged in developing crypto technology, comprehending blockchain, and smart contracts.” The central banker highlighted that it is also preparing for a Web 3.0 environment.
Singapore is competing with places such as Malta, Switzerland, and El Salvador in the race to lure crypto firms. The work is challenging since, in many situations, the crypto business has flourished with minimal laws, and players are opposed to government attempts to impose restrictions. Binance, the world’s top digital asset exchange, is a prominent crypto platform that is already operational in Singapore.
MAS announced earlier this year that 170 companies have applied for payment service licences, bringing the total number of applicants under its Payment Services Act to 400 as of January 2020. The authorities stated in August that it had alerted many providers that it was going to licence them. However, only three crypto businesses have acquired permits since then, including the brokerage arm of Singapore’s largest bank, DBS. Approximately 30 additional organisations have withdrawn their applications.
The MAS’s managing director stated that the agency is taking its time assessing applicants to ensure that they meet its stringent requirements. The authority has prepared its resources to work with an expanding number of licensees, but it also emphasised:
“We don’t need 160 of them to set up shop here. Half of them can do so, but with very high standards, which I think is a better outcome.”
Menon believes that the advantages of a well-regulated domestic crypto economy could extend beyond the financial sector. “If and when a crypto economy takes off in a way, we want to be one of the leading players,” he was convinced, saying that the crypto field can help create jobs and add value even more than the existing financial industry.