The Monetary Authority of Singapore (MAS), the country’s central bank and regulator of the crypto sector, says its licensing process for digital asset service providers needs to be tightened. “It must be because we want to be a responsible global crypto hub with innovative players, but at the same time with strong risk management capabilities,” said the head of the central bank.
Singapore’s crypto regulation needs to be ‘stricter’
Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS), spoke about cryptocurrency regulation at the Financial Times Crypto and Digital Asset Summit on Wednesday.
Bloomberg reported that the central bank chief raised concerns for retail investors about the risks of investing in crypto assets. Noting that crypto can be used for money laundering and terrorism financing, Menon emphasized:
The licensing process is strict. And it has to be because we want to be a responsible global crypto hub with innovative players, but also with strong risk management capabilities.
Singapore’s central bank has approved only a small fraction of the approximately 170 digital asset applicants. More than 100 companies that have applied for a license to operate a crypto business have already failed to meet the licensing requirements.
MAS’s managing director explained that the central bank has taken a “harder line” on retail crypto investments “because we are not sure it is a good idea for retail investors to dabble in cryptocurrency.” He was quoted as saying:
I think many global regulators share similar concerns about the retail risk of cryptocurrencies.
Menon elaborated that MAS looks at the track record of applicants and whether they have strong corporate governance structures. In addition, “they need to be familiar with money laundering, terrorist financing risks,” he said.
The central bank boss further stated that crypto assets currently do not pose a threat to the financial system, but do pose risks of money laundering and terrorism financing.
MAS issued “Guidelines to Discourage Cryptocurrency Trading by the General Public” in January, stating that “trading cryptocurrencies is highly risky and not suitable for the general public.” The central bank also noted that crypto service providers were actively promoting their services through ATMs in public areas, emphasizing that this was done to the public “on impulse, without fully understanding the attendant risks”. Can encourage you to do business.
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