“I see no basis for regulating cryptocurrencies,” Singapore central bank chief told Bloomberg – Image source: ST
Singapore has no plans of regulating cryptocurrencies, but will remain on the lookout for money laundering and other illicit financing purposes, the head of the country’s central bank said.
“As of now, I see no basis for regulating cryptocurrencies,” Monetary Authority of Singapore (MAS) Managing Director Ravi Menon told Bloomberg.
According to Menon, cryptocurrencies themselves pose no risks that would warrant regulation. The Singapore central bank will, however, remain alert to money laundering, terrorism financing and other illicit activities surrounding cryptocurrencies.
“Very few jurisdictions regulate cryptocurrencies per se. I think we’ve all taken the approach that cryptocurrency itself does not pose the risk that warrants regulation. Our approach is to look at the activity around the cryptocurrency and then make an assessment to figure out what kind of regulation would be suitable. One example: we expect the cryptocurrency intermediary to have anti money laundering controls in place, because it is a known fact that cryptocurrencies are quite often abused for illicit financing purposes. So, we do want to have anti money laundering controls, countering the financing of terrorism controls in place. Those requirements apply to the activity around cryptocurrency rather than cryptocurrency itself,” Menon explained.
Singapore already requires digital currency intermediaries to act in accordance with anti money laundering and terrorism financing requirements.
The MAS managing director highlighted the need to separate cryptocurrencies from the blockchain technology and look at the benefits they could yield with an open mind.
Our attitude is: let’s keep an open mind on it. I think it’s one of the areas where there’s been excessive hype, because people see it merely as an investment vehicle that’s going to rise in value, and I think that’s a rather misguided approach to the use of cryptocurrencies.
“[Cryptocurrencies] can have potentially good applications in particular cases, depending on how they’re used. So, it’s not so much the cryptocurrency or its value that’s important, it’s their application. Can they make cross-border inter-bank payments, for instance, cheaper, faster, more efficient, for migrant workers to send money back home? If it’s going through blockchain technology using cryptocurrencies, it could yield benefits. That I think ought to be the question, rather than whether bitcoin or ether are going up in value or not,” Menen explained.
The Monetary Authority of Singapore is one of the early adopters of blockchain technology. Singapore has developed and deployed a tokenized form of the Singapore Dollar (SGD) over a private Ethereum blockchain earlier this year.