Singapore’s deputy prime minister has revealed the central bank is keeping an eye on developments in cryptocurrencies and ICO fundraising, with a regulatory framework for the latter.
In response to a question in the Singaporean Parliament this week, Deputy Prime Minister and Minister in charge of the Monetary Authority of Singapore (the central bank) Tharman Shanmugaratnam said that the authority is looking into the use of virtual currencies and, subsequently, working on a “new payment services regulatory framework” to address money laundering and terrorism financing risks.
In posing the question, Member of Parliament Miss Cheng Li Hui asked:
“To ask the Prime Minister (a) whether the Government is keeping track of the use/investment of crypto currencies such as bitcoin in Singapore; (b) how do crypto currencies affect our finance industry; (c) whether studies are being conducted to assess the problems and risks of using/investing in crypto currencies; and (d) whether regulatory frameworks are necessary in the future.”
In response, Singaporean deputy prime minister Shanmugaratnam confirmed that while cryptocurrency wasn’t deemed ‘legal tender’ in the country, cryptocurrencies like “Bitcoin and Ether have been adopted by people in some communities to pay one another or to pay for goods and services.”
Further, the official confirmed the MAS “has been monitoring” the use of cryptocurrencies in Singapore.
Pointedly, he added that virtual currencies weren’t subjected to direct regulation by the central bank. However, the MAS is working on a regulatory framework for risks associated with virtual currency transactions.
The deputy prime minister stated:
Similar to most jurisdictions, MAS does not regulate virtual currencies per se. However, we regulate the activities that surround them if those activities fall within our more general ambit as financial regulator…[As an example] Virtual currencies, due to the anonymous nature of the transactions, can be exploited for money laundering and terrorism financing risks. MAS is working on a new payment services regulatory framework that will address these risks.
Further, the official added that initial coin offerings (ICOs) represent fundraising activities that “fall under MAS’ regulatory ambit.’ Although publicly stating that ICOs must comply with existing securities laws earlier in April, the Singaporean politician confirmed that the central bank will continue to monitor ICOs in the future, with the possibility of legislation.
MAS has not issued new legislation specifically for ICOs. We will continue to monitor the developments of such offers, and consider more targeted legislation of necessary.
Shanmugaratnam went on to state that the central bank’s focus lies in assets such as company shares, rather than virtual currencies or digital tokens. “MAS does not and cannot regulate all products that people put their money in thinking that they will appreciate in value,” the official concluded, whilst adding that the central bank will continue to work on publishing advisories on the risks related to scams abusing digital currencies.
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Last modified: March 4, 2021 5:00 PM