Singapore’s Deputy Prime Minister has finally stated how the country intends to regulate and legally define cryptocurrencies in the future.
Singapore’s Deputy Prime Minister, Coordinating Minister for Economic and Social Policies, and Chairman of the Monetary Authority of Singapore (MAS), Mr. Tharman Shanmugaratnam, recently clarified the uncertain future of bitcoin and ICOs during a parliamentary conference. In responding to a question regarding the MAS’s regulatory policies regarding cryptocurrency, Shanmugaratnam stated that the MAS will consider cryptocurrencies, as well as ICOs, to fall outside of financial legislation. Instead, the MAS will seek to regulate cryptocurrency and ICO companies.
Mr. Shanmugaratnam was asked whether the government is keeping tabs on cryptocurrency investments, such as bitcoin, in Singapore. Other questions about the future of bitcoin legislation in Singapore were also directed at the MAS Chairman, such as how cryptocurrencies affected the Singapore finance sector as well as whether studies are being conducted to assess problems and risks that may arise when investing in cryptocurrencies. Lastly, questions were also raised as to future cryptocurrency regulating policies.
In response, Shanmugaratnam pointed to several factors. First, he made it clear that Singapore’s central bank does not consider any cryptocurrency as legal tender. According to Shanmugaratnam, a legal tender is the medium of exchange that is recognized by law to be valid and that meets certain financial obligations.
The MAS Chairman then continued to confirm that the MAS has been monitoring. According to Shanmugaratnam, Singapore-based financial regulators did not consider the usage of digital currencies prevalent enough in Singapore. Only an estimated 20 retailers and vendors currently accept bitcoin and other cryptocurrencies as a payment method.
Due to the current niche usage of cryptocurrencies, the financial sector in Singapore does not consider the to be significant. Shanmugaratnam stated that the MAS has concluded that all digital currency trading is mainly for speculative investment. Currently, Singapore's daily trading volumes are significantly lower than those in China, Japan, and the United States.
When it comes to regulating policies, Shanmugaratnam stated that the MAS will not regulate cryptocurrencies themselves, but rather the activities that surround the currencies, as those activities are more in line with the MAS. The MAS is currently in the process of creating a new of regulating policies to address the rising issue of money laundering and terrorist financing that is often associated with cryptocurrencies.
Despite Singapore’s financial sector shrugging off cryptocurrencies, Shanmugaratnam has confirmed that the MAS will soon introduce a set of regulations that address ICOs. Shanmugaratnam emphasized that all digital tokens generated through ICOs will become subject to certain regulatory requirements, including having to register a prospectus, applying for intermediary or exchange operator licenses, and mandatory compliance with anti-money launder and terror financing laws.
According to Shanmugaratnam, the MAS seems to be more focused on regulating the ICO industry, and the Deputy Prime Minister has stated that the MAS will rectify their policies as necessary.
Over the last few weeks, there have been several detailed reports where Singapore-based bitcoin startups had their bank accounts forcefully closed due to the legal uncertainty of bitcoin. Singapore’s latest intention to create certain regulations in the cryptocurrency trading markets is sure to bring some stability in the rapidly growing industry.