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Singapore has no plans to regulate cryptocurrencies like bitcoin and the central bank will keep "an open mind," the Head of Authority revealed.
The Monetary Authority of Singapore (MAS), the central bank and the country's regulatory authority, will not regulate cryptocurrencies but "expects" that intermediaries will put in place Anti-money laundering controls, according to Ravi Menon.
Speaking of an interview with Bloomberg, the central banker was asked if crypto-currencies like bitcoin require regulation if Singapore became a hotbed for ICOs, a new popular form of fund-raising enabled by crypto- currencies.
In response, Menon stated that "very few jurisdictions regulate cryptocurrencies" before revealing the view of the authority over the exercise of control, if any.
He declared:
We have adopted the approach that the currency itself does not pose the risk that justifies regulation. Our approach is to look at the activity around cryptocurrency and then do a regulatory assessment that would be appropriate.
For example, Menon pointed to the expectation of an intermediary dealing with cryptocurrencies, such as a bitcoin exchange or a trading platform, to establish anti-money laundering controls.
Refreshing, the central banker went against the usual narrative of a cryptocurrencies undermining authority, stating:
[I] t is a known fact that cryptocurrencies are quite often misused for illicit financing purposes, so we want to have AML / CFT controls in place. These requirements therefore apply to the activity around the cryptocurrency, rather than the cryptocurrency itself.
Menon also commented remarkably for a central banker when he was asked to offer his perspective on the advent of cryptocurrencies in corporations. Bitcoin has attracted the attention of the general public this year, rising from $ 1,000 at the end of 2017 to a record high of nearly $ 6,200. The official pointed to the "hype" surrounding value gains as a misguided approach to exploit the potential for cryptocurrencies beyond a store of value.
He declared:
People simply see it as an investment vehicle that will gain value. I think it's a rather misguided approach to using cryptocurrencies. They may have potentially good applications in particular use cases … cryptocurrency value is not important, it is the application in which they are used.
"Can they make cross-border interbank payments cheaper, faster and more efficient for migrant workers to send money back to their villages?" Asked Menon, raising the question of a wider application of cryptocurrency.
added:
If [cross-border remittance] went through a blockchain using cryptocurrencies, this could have advantages. That should be the question, rather than whether bitcoins or ether are worth it or not.
One of the first followers of blockchain technology among central banks around the world, MAS invests heavily in the testing and development of its own digital currency under the banner "Project Ubin" – an initiative of the central bank to develop and deploy Singaporean dollars digitized on a blockchain. MAS issued digital Singapore dollar tokens on a private Ethereum blockchain in a test earlier this year.
Image from Shutterstock.