Singapore has become a cryptocurrency “safe haven”: the first batch of trading platforms have been “approved in principle”

A few years ago, central banks of various countries began to “frown” on cryptocurrencies, including Bitcoin, but did not make a big move. However, cryptocurrencies may face a “cold winter” in the near future.

The suppression of the entire cryptocurrency ecosystem has been extended to cryptocurrency trading platforms. Binance Payment has been largely restricted in the UK, and supervision has also spread from London to Brussels, Hong Kong and other places, and penetrates to Kuala Lumpur. The two parties in the United States, which have always disagreed on a variety of issues, have also rarely found common ground on the issue of cryptocurrency. New Jersey and other states have recently targeted the cryptocurrency platform BlockFi, accusing their accounts of constituting an unregistered securities issuance. It is required to stop providing the product immediately.

Firm supporters, fast-profit traders, and cryptocurrency stakeholders have begun to turn their eyes to a tolerant place-Singapore. Binance, Ethereum, Gemini, etc. are all here.

Facing the “immigrants” of cryptocurrency, Singapore, which prides itself on its “financial openness” attitude, will inevitably have a dilemma while adhering to itself: allowing its development will be contrary to the attitudes of major countries such as Europe, America and China, and it may face global pressure in the future; Joining the latter’s camp may miss the opportunity of financial technology.

The first batch of trading platforms have been “approved in principle” and are in process

Singapore seems to have made a choice, or at least an exploration.

On August 2, local time, the Independent Reserve, an Australian cryptocurrency exchange, announced that it had obtained “principle approval from the Monetary Authority of Singapore (MAS) under the Payment Services Act” (PSA). “(In-principle approval), allowing it to become a regulated digital payment token (DPT) service provider.

According to the Independent Reserve statement, the company is not the only organization that has been granted a license. “As one of the first cryptocurrency exchanges approved by the MAS principle, this reflects our good daily operation policies, procedures and risk control system. It also provides certainty for industry participants and security for customers. .”

Several cryptocurrency trading platforms told reporters from 21st Century Business Herald that Singapore’s attitude has always been friendly from a global perspective.

Wang Haifeng, a senior researcher at Ouke Yunchain Research Institute, told reporters that Independent Reserve, as the first platform to obtain “principle approval”, demonstrates and confirms Singapore’s positive and friendly attitude towards related fields. “In fact, as early as November 2018, Singapore expanded its regulatory system and implemented a compulsory licensing system. In the long run, it will be beneficial to relevant companies to develop innovative services within compliance. Especially in the context of stricter global regulations, Let Singapore become a hot spot for blockchain innovation and development.”

Previously, Tharman Shanmugaratnam, Singapore’s senior minister and chairman of the Monetary Authority of Singapore, stated in a meeting held on July 26 that several applicant institutions are entering the final verification stage to obtain services as digital payment token service providers. License.

“Since the Payment Services Act came into effect in January 2020, about 170 digital token trading platforms have applied for digital payment service licenses.” He added, “After MAS has further contacted them, 30 applications have been withdrawn, 2 The application was rejected. At present, about 90 service providers continue to operate without license exemption.”

In January 2020, the Payment Services Act (PSA) came into effect. All DPT service providers operating in Singapore, including crypto exchanges, must be registered and licensed. The new “Payment Services Act” expands the scope of supervision of MAS, includes new payment services such as digital payment token services, and screens its customer protection mechanisms, transaction and compliance structures, etc., to ensure that payment companies comply with anti-money laundering (AML) And counter-terrorism financing (CFT) requirements.

In this regard, Independent Reserve said that in order to obtain a license, virtual asset service providers must implement controls to ensure proper due diligence and adequate risk disclosure.

The Payment Services Act clarified the license for digital tokens for the first time. Depending on the nature and scope of the service, payment service providers need to apply for a “currency exchange” license, a “standard payment institution” license, and a major payment institution license based on their respective circumstances. According to the Act, the eligibility requirement for permit applications is that at least one of the company’s directors is a Singaporean or a permanent resident living in Singapore. This means that it is much easier for cryptocurrency exchanges to establish services in Singapore.

However, so far, MAS has not approved any encryption licenses, and DPT service providers have thus been operating under the condition that PSA is exempt from holding licenses. At this stage, entities and companies that have been exempted include Huobi, OKCoin, Bitstamp, Coinbase, Ripple, and BitGo.

“Principle approval is actually formal approval.” A person related to the cryptocurrency platform told reporters, “Only after the process and procedures are completed.”

Singapore is going against the current, financial risks should not be underestimated

Your honey is your arsenic. Singapore has gradually absorbed part of the dividends of Hong Kong, another Asian financial center partner. Although the epidemic has put most of the economies under heavy pressure, it has little impact on Singapore’s absorption of financial factors.

Although the attitude towards cryptocurrency has always been friendly, MAS also faces a dilemma. Cryptocurrency may be a blue ocean of technology, and it is also an opportunity for the further development of Singapore’s finance. In a resource-scarce Singapore, tourism and technology finance are the two key pillars for attracting funds. The current form is just right, and the influx of cryptocurrency platforms will continue in speed and scale. If we ignore the potential of the cryptocurrency industry in attracting capital, technology, and personnel, it may cause Singapore to miss out on opportunities.

But another practical problem is that if the Singaporean authorities go against the current and insist on creating a relatively friendly regulatory environment, it will not only run counter to Hong Kong, Mainland China and other major countries, but the potential illegal activities and financial stability risks brought by cryptocurrency should not be small. watch for.

Regarding “Binance”, a popular global regulatory target, MAS only stated that it will follow up. “We will follow up on Binance Holdings’ subsidiary in Singapore as required. We understand the actions taken by other regulators against Binance and will take appropriate follow-up actions,” MAS said.

Binance CEO Changpeng Zhao has moved the platform to Singapore, temporarily avoiding the limelight from rounds of supervision, and simultaneously posting job postings on LinkedIn. According to financial times, Vitalik Buterin, the founder of the cryptocurrency Ether, is also here.

In June of this year, the US cryptocurrency trading platform Gemini chose Singapore as its Asian headquarters and appointed Jeremy Ng as the head of the Asia-Pacific region, based in Singapore. Gemini stated that it will apply for a license from the Monetary Authority of Singapore (MAS) in accordance with Singapore’s 2019 Payment Services Act as part of its global expansion strategy.

“Singapore is a major financial center in Asia and has a large number of customers, especially those in the private wealth sector. We have had conversations with many wealth management companies, and everyone needs a cryptocurrency solution.” Jeremy Ng said, “Retail in the Asia-Pacific region And institutional customers can buy, sell, store and earn more than 40 cryptocurrencies, and support the exchange of fiat currencies in Singapore dollars, Australian dollars and Hong Kong dollars.” Gemini is currently working with SingPass to simplify the process of Singapore residents opening accounts in Gemini, while ensuring Security and compliance.

In addition to becoming a platform safe haven, MAS’s friendly attitude is also reflected in its statement that it will provide assistance to the damage of cryptocurrency investors. Compared with the euro area, it is obviously responsible for a lot.

“Bitcoin and other cryptocurrencies have no value support at all, and investors need to face the risk of substantial or even total loss of funds.” This is the official oral language of the European Central Bank (ECB). It may mean that once the interests of cryptocurrency investors are damaged, the central bank is unlikely to provide corresponding support.

On May 10th, local time, MAS Chairman Tharman Shanmugaratnam said in response to “what measures will be taken to restrict retail investors’ exposure to crypto asset trading and investment”, MAS has repeatedly warned that investing in crypto Currency is risky and not suitable for retail investors. The prices of most cryptocurrencies are affected by speculative fluctuations. ” Individuals who are in debt after investment or financial losses may be directed to the Singapore Credit Consulting Company, which will work with them to understand their financial situation and assist them in reaching appropriate debt repayment arrangements with their creditors.”

“In my opinion, Singapore’s attitude has always been considered to be tolerant and firm.” said a cryptocurrency analyst, “but it is inevitable to be subject to a series of external pressures.”

On June 28, local time, MAS President Ravi Menon delivered a speech on “The Future of Decentralized Finance and Currency”. He said that compared with the current centralized system, technology is making a completely different approach to financial infrastructure possible. Decentralized financial infrastructure and open encrypted networks can also potentially enhance inclusiveness and innovation. When companies of all sizes and even individuals can directly access the financial infrastructure, more competition and tolerance can be realized.

The central bank-endorsed digital currency (CBDC) was mentioned twice in this speech, and the above content can more be regarded as an official statement on digital currency/virtual currency.

“The key question about the future of currency is: What is the appropriate division of labor between the public and private sectors?” Ravi Menon said. “One extreme is a fully centralized system, that is, only central bank currency; In a decentralized system, only private currency is in circulation.” In his view, given their respective cultural norms, social contracts, and institutional structures, each country must choose a different position in this unity.

“Stefan Ingves (the governor of the Riksbank) once told me that, in the final analysis, this is not even a monetary issue. The future of currency is too important to be completely determined by the central bank.” He added immediately.

Even though MAS has opened a convenience for the first batch of license applicants this time, cryptocurrency traders still can’t help but worry about whether MAS will not hesitate to license the license and will the loose supervision field continue?

“We hope that the government and regulatory agencies will clarify what digital asset service providers can and cannot do. Boundary and clear supervision is a good start and a catalyst for development.” said a person in charge of a cryptocurrency trading platform.


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