Several prominent countries like the United States and the United Kingdom are struggling to formulate comprehensive crypto regulations to tackle the ongoing market volatility. Singapore, which currently is a hub of technological advancements in the world, is also the home of many software companies. The regulators and traditional banks are working to provide uniformity to potential customers from the crypto sector.
According to reports, the collaboration between the Monetary Authority of Singapore (MAS) and the traditional banks has been in process for 6 months. The MAS is taking the help of local police to facilitate the banks regarding the procedure of opening accounts of digital assets service providers. The conclusions of this six-month-long cooperation will be published in the next two months.
The upcoming guidelines will not be enforceable to banks but they need to follow a self-assessment mechanism. According to reports, the potential guidelines will cover issues of stablecoins, non-fungible tokens (NFTs), and transferable gaming. The representatives of the Monetary Authority of Singapore informed that “Banks make their determination of whether to start or continue a banking relationship with a customer”.
In 2021, a global crypto ranking report showed that Singapore is currently the most crypto-friendly country because of its robust economy and positive guidelines. It is also said that the country has the highest crypto adoption rate in the world. The country’s main financial regulatory body, the MAS did exemplary work in the policy formulation related to cryptocurrency management by implementing prompt regulatory measures.
However, in 2022, Singapore presented a proposal to ban digital token service providers from offering any credit facility to consumers which caused an outage among the crypto lobbyists. The ban includes both fiat and cryptocurrencies.
In February 2023, the United States Securities and Exchange Commission accused Terraform Labs and its founder Lee Kwon of orchestrating multi-billion dollar crypto asset securities fraud. After this incident on 6 March, the Singaporean authorities launched a probe connected to Terraform’s Labs. The proactiveness of authorities in launching a probe to protect customers is a commendable step by Singapore.
However, it will be interesting to see the upcoming guidelines for digital assets service providers in the months to come.