„Our mission is not to loosen up our rules and regulations to lure more cryptocurrency investors,” the managing director of Singapore’s Monetary Authority Ravi Menon said in an interview for Bloomberg. “We will try to create a bridge to eliminate the gap between fintech startups and financial institutions.”
Singapore’s government has been developing its fintech sector as a measure for creating more job openings and branching the economy. At the same time, it is being cautious with regulating exchanges and other crypto-related aspects of the modern economy.
The regulatory decision comes after massive complaint cases from cryptocurrency fintech startups, claiming they can’t set up local bank accounts in Singapore, or the already opened accounts have been suspended.
“Not being able to open bank accounts for crypto-related companies in Singapore is a major issue. We are trying to do our best for the companies without compromising the way we deal with this difference in nature business.”, Menon added.
The biggest concern of Singapore’s Monetary Authority is that cryptocurrencies, with their anonymous approach, can be a safe house for various money laundering parties and financial crimes.
Singapore’s government is trying to implement a hybrid between Japan’s welcoming licensing system and China’s complete Initial Coin Offerings and exchanges ban.
Japan is leading the way in cryptocurrency startup licensing, with more than 15 exchanges now authorized by Japan’s Financial Service Agency. Singapore’s government has split tokens and exchanges into three primary categories – utilities, securities, and payments. Each category has different regulatory restrictions.
The most freed from regulations is the utility token category. Tokens that serve as securities are in the second category, with governance by the Futures and Securities Act. Bitcoin and other crypto payment methods are put in the third category, marked as “Risky” due to their high volatility.
“If a given ICO is not a security coin or token, we don’t have any problems with regulation. There has been a lot of utility-based ICO startups. These startups are raising funds in interesting ways, and we want to support them”, Melon stated.
Singapore’s Monetary Authority’s most significant issues when regulating the cryptocurrency sector are ensuring user security and the prevention of money laundering.