Central Bank of Singapore Sees No Reason to Regulate Cryptocurrencies
Singapore has no plans to regulate cryptocurrencies such as bitcoin, according to the head of the Monetary Authority of Singapore. However, some laws are being formalized that could apply to some cryptocurrency activities and initial coin offerings (ICOs).
The managing director of the Monetary Authority of Singapore (MAS), Ravi Menon, expressed in an interview on Tuesday that “Singapore doesn’t plan to regulate cryptocurrencies such as bitcoin,” Bloomberg reported. However, he added that it “will remain alert to money laundering and other potential risks stemming from their use.” He was quoted saying:
As of now I see no basis for wanting to regulate cryptocurrencies.
Instead, the central bank will focus on looking at “the activities surrounding the cryptocurrency and asking ourselves what kinds of risks they pose, which risks would require a regulatory response, and then proceed from there,” he detailed.
Ramon’s stance confirmed a statement by Singapore’s Deputy Prime Minister, Tharman Shanmugaratnam. Responding to a parliamentary question regarding cryptocurrency regulation, he said, “we regulate the activities that surround them [cryptocurrencies], if those activities fall within our more general ambit as financial regulator.”
Menon noted that Singapore already requires digital currency intermediaries such as bitcoin exchange operators to comply with requirements to combat money laundering and terrorism financing. “This will be formalized in the coming payment services regulation which we are working on,” he added.
In a different interview with Bloomberg Television, he shared, “very few jurisdictions regulate cryptocurrencies per se. Most have taken the approach that the currency itself does not pose a risk that warrants regulation.”
Last month, a few banks in the country ceased doing business with several cryptocurrency startups. According to the local Cryptocurrency and Blockchain Industry Association, over ten companies have had issues with local banks, which provided no explanations for the account closures.
Singapore’s Law for ICOs
“If ICOs include the promise of a dividend or other economic benefits, they can resemble regular securities offerings and would, therefore, be covered by Singapore’s Securities and Futures Act [SFA],” Bloomberg conveyed Menon’s explanation on Tuesday.
His position reiterates the statement issued by MAS in August on ICOs, stating that:
MAS’ position of not regulating virtual currencies is similar to that of most jurisdictions. However, MAS has observed that the function of digital tokens has evolved beyond just being a virtual currency.
The central bank further explained in its statement that digital tokens “may represent ownership or a security interest over an issuer’s assets or property,” which could make them “an offer of shares or units in a collective investment scheme under the SFA.” In addition, “digital tokens may also represent a debt owed by an issuer and be considered a debenture under the SFA.”
“So we just have to look at them case by case to see which ones we will need to bring into the regulatory ambit, and which ones can stay outside,” Menon concluded.