Singapore, already a major financial center in the world, is now aiming to become a cryptocurrency hub as well. The city-state is seeking to ensure its role as a leading player in the crypto space, the head of its central banking institution said in recent comments.
Singapore to Establish Itself as Center for Crypto Business
Authorities in Singapore are taking steps to cement its position as a key player in crypto business, the official who has been at the helm of the Monetary Authority of Singapore (MAS) for a decade has revealed in an interview. It comes as Singapore and other financial centers around the world explore ways to regulate the rapidly growing industry. Quoted by Bloomberg, MAS Managing Director Ravi Menon said:
We think the best approach is not to clamp down or ban these things.
MAS is Singapore’s central banking institution responsible for establishing rules for banks and financial corporations. The authority is now trying to also introduce “strong regulation” for companies dealing with cryptocurrency, to allow those that meet its requirements and properly address the full range of associated risks to operate in the jurisdiction.
“With the crypto-based business, this is essentially an investment in the prospective future, the form of which is unclear at this point,” noted Menon. The executive warned that Singapore risks being left behind if it doesn’t get involved in the space. He further elaborated:
Getting into this game early means we can get a head start and better understand its potential benefits as well as its risks.
Ravi Menon insisted that Singapore must raise its safeguards to counter risks including those related to illicit flows. At the same time, the city-state is “interested in the development of cryptographic technology, the understanding of blockchain, smart contracts”. It is also preparing for a Web 3.0 world, said the central banker.
In the race to attract crypto businesses, Singapore is competing with destinations such as Malta, Switzerland, and El Salvador, among others. The task is difficult because in many cases the crypto industry has grown with few regulations as players oppose government attempts to introduce limitations. Binance, the world’s leading digital asset exchange, is already a major crypto platform already operating in Singapore.
Earlier this year, MAS announced that 170 companies had applied for payment service licenses, bringing the total of applicants under its Payment Services Act from January 2020 to 400. In August, the authority a revealed that she had informed several vendors that she was going to license them. However, just three crypto companies have since received the permits, including the brokerage arm of DBS, Singapore’s largest bank. Around 30 other entities have withdrawn their applications.
MAS director general stressed that the regulator takes the time to assess applicants to ensure they meet its high standards. The authority has prepared itself in terms of resources to work with an increasing number of licensees but also stressed:
We don’t need 160 of them to settle here. Half of them can do it, but with very high standards I think it’s a better result.
Menon is convinced that the benefits of having a well-regulated domestic crypto industry could also extend beyond the financial sector. “If and when a crypto economy takes off in a certain way, we want to be a major player,” he insisted, adding that the crypto space can help create jobs and further value. more than the traditional financial industry.
