While financial regulators worldwide are grappling with approaches on how to handle crypto assets, Singapore is aiming to establish itself as the globe’s key hub for cryptocurrency-related business activities.
Speaking to Bloomberg Tuesday, November 2, Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), talked about the development and said that “We think the best approach is not to clamp down or ban these things.”
Instead, the MAS – the government that regulates the financial sector in Singapore – is developing “strong regulation” so that firms that meet its requirements and address risks can operate and do their businesses, Menon said.
Mr. Menon, who has been at the leadership at the MAS for about ten years, said that Singapore might have been left behind had it not embraced a head start on how to handle crypto assets.
The executive said that “with crypto-based activities, it is basically an investment in a prospective future, the shape of which is not clear at this point,” admitting that the country’s initiative to get early into the game enabled the country to understand better potential benefits and risks associated with cryptocurrencies.
Since Singapore is known to have already obtained a reputation as a global wealth hub, Menon stated that the country must enhance its safeguards (security measures) to counter crises, including illicit flows.
He disclosed that the city-state is “interested in developing crypto technology, understanding blockchain, smart contracts and preparing ourselves for a Web 3.0 world,” referring to the third generation of online services.
Multiple factors, both geopolitical and financial, have made Singapore emerge as a major hub for cryptocurrency businesses.
With the recent crackdown on crypto activities, Singapore welcomed crypto businesses, investors, and exchanges from China into its crypto-friendly location.
Singapore has created a crypto-enabling environment by developing a legislative framework that favours the use of cryptocurrencies. This has seen the fast-growing crypto market in the nation boom and an influx of crypto businesses such as Binance, which has had several legal disputes with regulators across the world, Gemini, a US-based exchange targeting institutional investors, among others.
International Approaches to Cryptocurrencies
Different nations across the world have taken very different approaches to handle cryptocurrencies.
Japan recently approved operations of specialized dedicated crypto investment funds in the country to give individual investors a way to diversify their broader portfolios.
On September 7, El Salvador became the first nation in the globe to embrace Bitcoin as legal tender alongside the US dollar.
While crypto-assets are legal in the US, the country does not have a consistent legal approach to them. The nation has abundant options for investing in the growing asset class, but regulators are concerned about crypto products like stablecoins, yield-generating products.
Meanwhile, Singapore is not the only country with cryptocurrency ambitions. Jurisdictions such as Zug in Switzerland, El Salvador, Miami, and Malta, are also making impressive efforts.
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