Singapore Monetary Authority has emphasized the need for cryptocurrency regulations to be stricter and comprehendible. Speaking at the Financial Crimes summit on virtual currencies on Wednesday, MAS MD Ravi Menon, said the country must adopt stricter rules to address potential risks and curb financial crimes and terrorism financing.
The head of the financial regulator disclosed Singapore’s aims to be a leading hub in the global crypto space with solid risk management. While adopting stricter rules is non-negotiable, Menon said the financial regulator must ensure that the rules are clear to investors and the industry.
MAS Expresses Concerns for Retail Investors
Menon said the regulatory body assumes a firm stance on digital asset investments. MAS is concerned about retail investors and whether dabbling into the crypto world is beneficial or risky.
“I believe regulators globally share the same concerns about the risks involved in crypto investing,” he said.
The executive talked about money laundering and other illicit financial crimes, adding that businesses dealing in digital tokens must be conversant with the risks. He mentioned that the MAS has a strict verification procedure for applicants and examines whether they have a robust corporate governance structure and solid track record. These determine if the application will be a success or not.
Although Menon acknowledged that crypto-assets are not dangerous to the economy, money laundering and terror funding are still significant risks. This is different from the Reserve Bank of India, which explicitly labeled virtual currency a threat to their national growth.
Will Rules Affect Singaporean Crypto Investors and Growth?
Singapore’s crypto adoption has massively grown in the past year. The adoption rate is arguably the fastest in the Asian region.
MAS has been working out the best strategy to regulate the industry. The latest decision was influenced by the need to facilitate the industry’s growth without risk exposure.
MAS has one of the stringent crypto licensing globally. This is evident in the number of license applications it has approved over one year.
Based on reports, the regulator has only granted a license to 87 applicants out of the 580 submissions it received. Applications from prominent exchanges like Coinbase are yet to receive approval as of this writing.
Earlier this April, MAS surprised cryptocurrency firms by passing a directive that enabled locally-registered VASPs to offer their services abroad without regulatory oversight from the monetary agency. In addition, the Parliament passed the Financial Services & Markets law that mandated the firms to be registered for the purpose of AML.
Despite its strict rules, Singapore’s regulations are flexible compared to other countries and praised by industry professionals. Businesses can get established provided they abide by all the laws. Else, they will have no choice but to leave. Binance and Bybit are examples of crypto firms that left Singapore.