No reason to regulate cryptocurrency - says Singapore

The Central Bank of Singapore recently announced that they have no intention of establishing regulatory frameworks for cryptocurrencies.
According to reports by Bloomberg, Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS), recently revealed in an interview earlier this week that Singapore has no plans in the work to create a regulatory framework for Bitcoin and other cryptocurrencies.

However, Menon added that the country will continue to be vigilant in their anti-money laundering campaign and will also monitor other possible risks associated with cryptocurrencies. Menon stated that so far, the country does not feel the necessity to step in and regulate cryptocurrencies.

Instead of regulating cryptocurrencies in its entirety, the Central Bank of Singapore intends to focus on activities associated with it, most notably that of initial coin offerings (ICOs). In regards to ICOs, before proceeding with regulations, the bank will conduct an investigation as to the risks involved in the process.

The managing director’s statement was echoed by the Deputy Prime Minister of Singapore, Tharman Shanmugaratnam. The Deputy Prime Minister recently responded to a question in parliament pertaining to the issues of cryptocurrency regulation. He stated stating that once the government starts imposing regulation on cryptocurrencies, the process would fall under the jurisdiction of the country's official financial regulator.

According to Menon, Singapore’s policies surrounding digital currencies already require activity to be conducted by approved cryptocurrency exchange platforms. These platforms are required to comply with certain anti-money laundering and anti-terrorist funding requirements before being allowed to operate within Singapore. Menon added that these policies will become more formalized in the future.

In addition, Menon also stated that there are very few available jurisdictions that are applicable to cryptocurrencies. The general approach in Singapore is that cryptocurrencies do not constitute enough of a threat to justify implementing regulation.

In the last few weeks, certain Singapore-based banks refused to do business with a significant number of cryptocurrency-based startups. The Singapore Cryptocurrency and Blockchain Industry Association confirmed that 10 different startups experienced problems with local banks. These banks failed to provide reasoning for refusing to provide these startups with banking services.

However, Singapore might implement regulations which address ICOs. According to Menon, since ICOs have similar properties to that of stock dividends or digital assets, they could ostensibly be considered as security offerings. If this is the case, then ICOs would become regulated by Singapore’s Securities and Futures Act (SFA).

This sentiment was also expressed by MAS earlier this year. MAS stated that they will not regulate cryptocurrencies themselves, however, in consideration to the function of virtual coins and the fact that is evolving beyond cryptocurrencies, the organization might choose to implement a regulatory framework in the future.

The Singapore Central Bank considers virtual coins to be indicative of ownership, or security interests, in terms of assets. This particular property could prove that ICOs may be eligible to fall under the regulation of the SFA.

Menon concluded his interview by stating that the Singapore authorities will continue to evaluate cryptocurrencies and ICOs on a case by case basis, and will implement regulation as they deem necessary.