Singapore Should not Implement ‘Extremely Lax’ Crypto Regulation, C-Bank Boss Says

Instead of loosening rules, it is more appropriate to help virtual currency companies to create banks accounts, Central Bank’s Managing explained.

Monetary Authority of Singapore (MAS) Managing Director Ravi Menon has said that he is against either introducing more crypto friendly oversight or implementing the Japanese model of an obligatory regime for virtual currency exchanges, Bloomberg reported Tuesday.

Instead of going down one of those paths, MAS will help Singapore-based crypto companies to open bank accounts, Menon explained, as several of them have problems with that issue. MAS serves as Singapore’s Central Bank and market regulator for security offerings.

“We should not be trying to create an extremely lax regulatory environment in order to attract that kind of business,” MAS’ Managing Director explained.

 “What we are trying to do is to bring the banks and cryptocurrency fintech startups together to see if there is some understanding they can reach… Some of these [crypto] activities are indeed quite opaque. I would not blame the banks for not opening the bank accounts.”

Currently, Singapore divides virtual currency assets into three categories, Menon explained. First one includes the so-called utility tokens, used as a payment vehicle in blockchain systems, and they do not need much regulation.

The second group covers cryptos that are securities, and they need registration, MAS’ boss outlined. Few tokens issued during Initial Coin Offerings (ICOs) are part of that category, according to Menon. The body has recently warned several crypto exchanges about trading cryptos that are securities without approval, and it has halted an ICO because it was not registered for that type of offering.

The third category includes payment tokens like Bitcoin (BTC), which are “highly risky” because of their price volatility, Central Bank’s Managing Director explained.

“There’s a lot of interesting business models out there trying to raise capital in interesting ways, which as far as the consumers are aware of what these are, we have no issues,” Menon said.

Singapore, which is one of the leading financial centers in Asia, tries to attract digital currency investments as a way to be more flexible than local competitors like Hong Kong. The Asian state did not follow China’s ban on virtual coin trading, but it is cautious towards cryptos.

Several crypto companies have established some of their activities in Singapore including Binance, and UpBit. In July, Japanese messaging giant Line launched its virtual coin trading platform in Singapore while waiting for Japanese and American regulatory approval.