The Managing Director of Singapore’s central bank, Ravi Menon, believes that cryptocurrency can be used in illegal activity and that it should be carefully regulated as such.
The head of the Monetary Authority of Singapore (the country’s central bank), Ravi Menon, has stated that the country’s crypto rules will involve a “stringent” licensing process. He believes that enforcing rigorous laws will turn the city-state into a global digital asset hub.
The MAS is looking for a happy medium when it comes to cryptocurrency regulations.
Despite its fast growth in popularity in recent years, the cryptocurrency sector remains a dangerous investment for retail investors. That is what Ravi Menon, the MAS’s Managing Director, cautioned in a recent interview. He warned that bitcoin and other cryptocurrencies might be used for money laundering and terrorism financing.
As a result, local governments must enact comprehensive market laws that provide safety and clarity to the general public. Menon claimed that Singapore aspires to become a worldwide crypto hub, but that in order to do so, the licensing process must be “stringent:”
“And it needs to be because we want to be a responsible global crypto hub with innovative players, but also with strong risk management capabilities.”
Menon stated that Singapore’s central bank is willing to strike a balance between fostering and regulating the rapidly rising digital asset sector. Individuals should be “acquainted with money-laundering and terrorist financing issues,” according to the CEO. Having said that, he believes it is unwise for retail investors to “dabble in cryptocurrencies.”
On the other hand, he believes bitcoin and altcoins do not now constitute a threat to the country’s financial network.
The Crypto Ecosystem of Singapore
The Asian city-state is one of the most technologically advanced countries in the world. As a result, it is no surprise that digital assets are very popular among its population. According to a recent survey, 43 percent of Singaporeans possess cryptocurrencies, and 46 percent plan to invest in the market by 2022.
At the same time, the authorities are generally optimistic about the asset class. Menon stated several months ago that banking regulators had no plans to ban crypto ventures, but rather to establish “strict regulation” on them.
Nonetheless, he dismissed the prospect of bitcoin becoming legal tender in Singapore because the asset does not qualify as “true money.” Because of its increased volatility, the CEO added, inexperienced investors should avoid it:
Earlier this year, the MAS advised local cryptocurrency companies not to promote their services in public or communicate with third parties, including social media influencers. They are only permitted to advertise on their own website, mobile applications, and official social media profiles.
The Singaporean Parliament adopted a new set of guidelines earlier this month. Only digital asset service companies based in the country but operating on foreign soil will be required to obtain a regulatory license, according to the statement.