There are many differences in the regulation of cryptocurrency. China recently cracked down on large amounts of crypto activity, while Japan has only recently permitted specialized cryptocurrency investment funds. El Salvador has, however, accepted Bitcoin (BTC), as a legal currency.
As global financial centres seek to regulate the sector globally, Singapore is striving to be the capital of crypto-related businesses. Ravi Menon (managing director of the Monetary Authority of Singapore) says that the city-state could have been left behind if it hadn’t gotten a headstart on dealing with cryptocurrencies.
Menon, who is the MAS’s head for around 10 years, said, “With crypto-based activity, it is basically an investiment in a potential future, the form of which isn’t clear at this stage.”
This country is leading the charge in this sector due to its openness towards cryptocurrencies and having created a legislative framework that supports their use. To encourage growth, the tax system has been also modified.
Menon says that MAS has put in place “very strict regulation” to ensure businesses meet its requirements and address all the threats to their operations.
Menon stated that Singapore needs to improve its security measures in order to combat illicit flows. The city-state is a magnet for cryptocurrency businessese, from Binance Holding (which has had a series if disputes with regulators around world) to Gemini, an American-based operator that targets institutional investors.
After the January 2020 implementation of the Payment Services Act, 170 companies applied for a MAS license. This brings the total number of applicants to 400.
Only a few cryptocurrency-related businesses have been granted the licenses since then. Two of them were rebuffed. After interacting with regulators, around 30 applicants withdrew the applications.
Cointelegraph reported that the license was granted to the DBS Group, Singapore’s largest bank and pioneer in the creation of a platform for trading and tokenization. OCBC and IBM are just a few of the other technology companies and banks that have joined the program.