Singapore has been seen as a favorable crypto destination until the country’s regulator’s started tightening the rules around virtual assets. But, despite facing competition from regions like Dubai, the authorities have stated that they will “chart their own path” and not “react to what other countries are doing.”
Daniel Lee, a former chief entrepreneur and listing at DBS Digital Exchange, remarked to MAS that crypto companies are running away from the nation state. Lee said, “You have now lost Binance and FTX to Dubai. We’ve lost 80% of the global market share of the total market to the Middle East, and those people are courted by France, Germany, and so on. »
In response, Monetary Authority of Singapore’s (MAS) Alvinder Singh said on Friday, “To think that we want to be a crypto hub like some countries that have oil and all that, overnight, no. That is not our objective at all. It is a medium-term objective, doing it responsibly, feeling our way around the sand,”
Singh, who heads MAS’ fintech ecosystem office, was speaking at the IDEG Institutional Digital Assets Summit, The Straits Times reported.
The official also stressed that crypto is the future of financial services, but he argued that it is not for retail investors.
Singapore prefers regulation for investor protection
In early January, MAS released guidelines to discourage cryptocurrency trading by the general public.
“MAS has consistently warned that trading DPTs is highly risky and not suitable for the general public, as the prices of DPTs are subject to sharp speculative swings,” the regulator had noted.
Recently, one of the largest lenders in the country, DBS Bank, decided to halt its crypto trading offering for investors amid regulatory uncertainty.
Regarding this, Singh said, “We know that a majority of our population here are not sophisticated enough to be able to synthesize all this information and make a correct, informed judgment.”
Adding that even some risky traditional asset classes fall into a similar category. But, Lee believes that fund managers can provide professional exposure to these retail clients. Lee remarked, “I also think that…if retail investors can’t get into this space, they will become vulnerable to scams. By cutting them off from all those proper centralized exchanges…it becomes a lot more problematic.
The executive also said that there can be clearer crypto rules to govern the domestic sector.
In April, the country’s new law provided that Singapore-based virtual asset service providers (VASPs) would be permitted even if they only conducted business overseas. This meant that all crypto businesses, domestic and foreign, had to be regulated under Singapore’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) guidelines.
Dubai might be donning Asia’s crypto crown
Last year, Ravi Menon, Managing Director of MAS, revealed in an interview with Bloomberg that crypto is ‘disruptive’ and Singapore wishes to lead the tech revolution. He had remarked, “If and when a crypto economy takes off in a way, we want to be one of the leading players.”
But lately, Dubai has emerged as a crucial crypto hub for investors and creators. Apart from approving a first virtual assets law, Dubai has also appointed the Dubai Virtual Assets Regulatory Authority as the sector supervisor.
Recently, Dubai-based crypto education platform Coinmarketpedia also announced that it has secured pre-seed funding of $2 million.
Meanwhile, the UAE is also the third-largest crypto market in the Middle East, according to data compiled by Chainalysis last year.
