The Monetary Authority of Singapore (MAS), the country’s central bank and regulator of the crypto industry, says its licensing process for digital asset service providers must be rigorous. “It has to be because we want to be a responsible global crypto hub with innovative players, but also with strong risk management capabilities,” the central bank chief said.
Singapore’s crypto regulations must be ‘strict’
The Chief Executive of the Monetary Authority of Singapore (MAS), Ravi Menon, spoke about cryptocurrency regulation at the Financial Times Crypto and Digital Asset Summit on Wednesday.
The central bank chief raised concerns about the risks of investing in crypto assets for retail investors, Bloomberg reported. Noting that crypto could be used for money laundering and terrorist financing, Menon pointed out:
The authorization process is rigorous. And it must 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 only approved a small fraction of around 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’ chief executive explained that the central bank has taken a “hard line” on investing in retail crypto “because we’re not sure it’s a good idea for retail investors to get into cryptocurrencies”. He was quoted as saying:
I think many global regulators share similar concerns about retailer exposure to cryptocurrencies.
Menon said the MAS looks at candidates’ backgrounds and whether they have strong corporate governance structures in place. Additionally, “they must be familiar with the risks of money laundering and terrorist financing,” he said.
The central bank boss further said that while crypto assets do not currently pose a threat to the financial system, there are risks of money laundering and terrorist financing.
The MAS published “Guidelines to Discourage Cryptocurrency Trading by the General Public” in January stating that “Cryptocurrency trading is highly risky and not suitable for the general public.” The central bank also noted that crypto service providers have been actively promoting their services through ATMs in public areas, noting that this could encourage the public to trade “on a whim, without fully understand the associated risks.
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