Business 26 October 2017Jasmine Solana
No plans to regulate cryptocurrencies in Singapore just yet
Even though it is gaining a massive following in Asia, cryptocurrencies like Bitcoin (BCH) poses no risks—for now—to warrant regulation in Singapore.
The Monetary Authority of Singapore (MAS) currently has no plans of regulating cryptocurrencies, but managing director Ravi Menon said they will keep a close watch on the potential risks from the use of the digital currencies.
In an interview with Bloomberg, Menon said the focus of the central bank, which also acts as the financial regulator, is to “look at the activities surrounding the cryptocurrency” and examine “what kinds of risks they pose, which risks would require a regulatory response” before making a decision.
Singapore already requires payment providers, including digital currency exchanges, to comply with anti-money laundering and terrorism financing requirements. In 2016, the central bank proposed a regulatory framework that will require companies involved in payment services to obtain a license from MAS. Under the proposal, exchanges like CoinHako, Coinbase and Quoine will be covered by a provision that oversees start-ups providing money transmission and conversion services.
Regulators around the world are keeping wary eyes on cryptocurrencies, especially with BTC’s price rally as well as the popularity of initial coin offerings (ICOs), a form of fundraising activity that involves selling digital tokens.
“Very few jurisdictions regulate cryptocurrencies per se. Most have taken the approach that the currency itself does not pose the risk that warrants regulation,” Menon said, adding that “it is a known fact that cryptocurrencies are quite often abused for illicit financing purposes. And so we do want to have anti money laundering controls, countering the financing of terrorism controls in place.”
Singapore’s stance on cryptocurrencies mirrors that of its Asian neighbor, the Philippines. The central bank of the Philippines, which has been keeping close tabs on domestic cryptocurrency-related transactions, released early this year a memorandum circular that addresses not BTC itself, but the activities around cryptocurrency.
The underlying technology behind virtual currencies removes the need for a central exchange, which, in turn, puts a lot of governments that make their income by taxing the movement of money in a bind. Tech pioneer John McAfee explained it best when he said that “there’s no way you can create a law or to legislate something that will stop Bitcoin or any cryptocurrency because technically, you cannot.”
However, the cryptocurrency space still needs to have a regulated environment—preferably a self-regulated one—to prevent people from fraudulently taking money from other people. But the industry is still young and dealing with different issues, which is why regulations from central banks are at times, a welcome news.
“Our attitude is let’s keep an open mind on it,” Menon said, according to the report. “I think that’s one of the areas where there’s been excessive hype because people see it merely as an investment vehicle that’s going to rise in value and I think that’s a rather misguided approach towards the use of cryptocurrencies.”
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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