The Monetary Authority of Singapore (MAS), the country’s central bank and the regulator of the crypto sector, says that its licensing process for digital asset service providers needs to be stringent. “It needs to be because we want to be a responsible global crypto hub with innovative players, but also with strong risk management capabilities,” said the central bank chief.
Singapore’s Crypto Regulation Needs to Be ‘Stringent’
Ravi Menon (Managing Director, Monetary Authority of Singapore) spoke Wednesday about cryptocurrency regulations at the Financial Times Crypto and Digital asset Summit.
Bloomberg reported that the central bank chief expressed concerns about retail investors investing in crypto assets. Menon noted that crypto might be used in money laundering or terrorism financing.
This licensing process is rigorous. We need to make sure that the licensing process is rigorous if we are to become a trusted global hub for crypto with innovative players and strong risk management.
Only a fraction of the 170 applicants for digital assets have been approved by Singapore’s central bank. The licensing requirements for crypto businesses have been met by more than 100 of the companies who applied to be licensed.
The MAS managing director explained that the central bank has taken a “tough line” on retail crypto investing “because we’re not sure that’s a good idea for retail investors to be dabbling in cryptocurrencies.” He was quoted as saying:
Global regulators have similar concerns regarding cryptocurrency retail exposure.
Menon detailed that the MAS looks at the applicants’ track record and whether they have strong corporate governance structures in place. In addition, “they need to be familiar with money laundering, terrorist financing risks,” he said.
According to the central bank chief, crypto assets are not currently a danger to the financial system. However, money laundering and terrorist financing risk exist.
The MAS issued “Guidelines to Discourage Cryptocurrency Trading by General Public” in January stating that “the trading of cryptocurrencies is highly risky and not suitable for the general public.” The central bank also noted that crypto service providers had been actively promoting their services through ATMs in public areas, stressing that it could encourage the public to trade “on impulse, without fully understanding the attendant risks.”
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