The Central Bank of Singapore has revealed they have no intentions of regulating cryptocurrencies such as bitcoin. Instead, the lender of last resort will monitor activities stemming from the use cryptocurrencies that pose a risk.
Ravi Menon, the Head of the Monetary Authority of Singapore(MAS) made the comments in an interview with Bloomberg on Wednesday. In his professional opinion, regulators are broadly concerned by activities such as money laundering and not the digital assets. He said:
"As of now, I see no basis for wanting to regulate cryptocurrencies. [Our focus is] look at the activities surrounding the cryptocurrency and asking ourselves what kinds of risks they pose, which risks would require a regulatory response, and then proceed from there."
As one of the most favorable jurisdictions for financial innovation, Ravi's comments come as a breath of fresh air for blockchain startups in a year when global agencies have swooped on the industry. At $171 billion total market cap, authorities are concerned about illicit flows that may be channeled through the billions of volumes changing hands daily.
Singapore's Chief Central Banker admitted as much saying the controls required around the exchange and trading of cryptocurrencies were no different than measures in place for the banking system. He added
"it is a known fact that cryptocurrencies are quite often abused for illicit financing purposes. And so we do want to have anti-money laundering controls, countering the financing of terrorism controls in place."
Already, virtual-currency intermediaries in Singapore have taken measures to comply with anti-money laundering and combating the finance of terrorism requirements in anticipating any move by monetary authorities. Menon revealed the bank was working on formalizing the proactive initiative by exchange operators in the country under an upcoming broader payment service regulation.
He also touched on the matter of contentious initial coin offerings, a crowdfunding method that rewards investors with digital tokens in exchange for capital funded in cryptocurrency. ICOs have attracted over $2 billion in capital this year alone, but they have also caught the attention of regulators in countries such China, Hong Kong, Canada and the US. Regulators believe some tokens are outright securities and should be regulated as such.
Menon reiterated the opinion of the Monetary Authority of Singapore which explained its position on the offer of digital tokens via a statement in August.
"the offer or issue of digital tokens in Singapore will be regulated by MAS if the digital tokens constitute products regulated under the Securities and Futures Act (Cap. 289) (SFA)."
He did note however that some business models were intentionally structured to avoid resembling securities and therefore, a case by case approach would be necessary to determine scope.