Cryptocurrencies are currently experiencing difficulties in East Asia, as a result of crackdowns and regulations in China, South Korea, and Hong Kong. Singapore, in the middle of this, is taking the opportunity to become the industry’s dominating player in Asia.
Singapore is establishing itself as Asia’s cryptocurrency capital, using its position as a global financial hub. “The technologies underpinning cryptocurrency products and digital tokens have the potential to fuel a new generation of financial services,” said Loo Siew Yee, assistant managing director of the Monetary Authority of Singapore’s (MAS) policy payments and financial crime group.
In contrast to its social conservatism, Singapore is renowned for its openness to financial innovation. The city-authorities state has not only underlined the potential benefits of cryptocurrency but also backed them up with legislation.
While cryptocurrency exchanges face scrutiny from banking regulators in other countries, the Singaporean government has taken a prominent role in influencing the industry’s development. Sander Laugs, head of institutional clients at Switzerland’s crypto-focused bank Seba, said that government support and regulation of the industry provide critical safeguards.
“Singapore thinks so long term about this,” one cryptocurrency exchange founder explained. “Several years ago, I attended a Vitalek Buterin lecture in town, and on my row, three members of the MAS were diligently taking notes.”
Registration of cryptocurrencies
Since January 2020, cryptocurrency businesses in Singapore have been eligible to apply for operating licenses under the Payment Services Act. The law controls businesses that process digital payments and trade cryptocurrencies such as Bitcoin. Numerous of the world’s largest cryptocurrency exchanges, including Gemini, Coinbase, and Crypto.com, have all submitted applications for operating licenses.
While nearly 20% of applications were withdrawn or refused due to non-compliance with AML regulations, many firms received exemptions, allowing them to continue serving retail and institutional investors. “Companies that have not adhered to established norms will likely have difficulty acquiring permits or conducting business as usual,” Laugs explained.
MAS placed the global website of the world’s largest cryptocurrency exchange Binance on its investor warning list earlier this month, effectively prohibiting Singaporean consumers from using it. However, the regulator made no changes to the site’s carefully regulated local version.
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