MAS says it won’t regulate crypto-currencies
(27 October 2017 – Singapore) The head of Singapore’s central bank has said it doesn’t plan to regulate cryptocurrencies such as bitcoin. However, the city-state will remain alert to illegal activity and other risks associated with their use.
“As of now I see no basis for wanting to regulate cryptocurrencies,” Monetary Authority of Singapore (MAS) Managing Director Ravi Menon told Bloomberg.
Menon added that MAS’s focus is to “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.”
“Very few jurisdictions regulate cryptocurrencies per se. Most have taken the approach that the currency itself does not pose the risk that warrants regulation," Menon said.
“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.”
“So those requirements apply to activity around cryptocurrency rather than the cryptocurrency itself,” Menon said.
Bitcoin’s rise and the emergence of cryptocurrencies are attracting regulators globally, though many central banks have still refrained from supervising cryptocurrencies. China and South Korea have banned initial coin offerings (ICOs), while Russia’s President Vladimir Putin has called for regulation of the sector.
Singapore currently requires virtual-currency intermediaries such as exchange operators to comply with requirements to combat money laundering and terrorism financing, Menon noted. “This will be formalized in the coming payment services regulation which we are working on,” he said.
Menon highlighted that the promise of dividends or economic benefits are covered by the regulators Securities and Futures Act. Other business models “avoid these security-like features in their digital tokens,” he added.
“So we just have to look at them case by case to see which ones we will need to bring into the regulatory ambit, and which ones can stay outside,” Menon said.
“Our attitude is let’s keep an open mind on it,” Menon said. “I think that’s one of the areas where there’s been excessive hype because people see it merely as an investment vehicle that’s going to rise in value and I think that’s a rather misguided approach towards the use of cryptocurrencies.”
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