Ravi Menon, the managing director of Singapore’s financial regulator, the Monetary Authority of Singapore (MAS), has recently revealed the organization is “willing” to help local cryptocurrency startups get banking services.
According to Bloomberg, Menon noted the MAS doesn’t plan on loosening its rules to lure more crypto startups to the country, but only to help those in there. He was quoted as saying:
What we are trying to do is to bring the banks and cryptocurrency fintech startups together to see if there is some understanding they can reach.
Per the publication, Singapore has been trying to use the fintech sector to create jobs and diversify its economy, while cautiously approaching cryptocurrency exchanges and other aspects of the nascent industry.
Earlier this year, some crypto startups complained banks in the country were either denying them services or shutting down their accounts. Menon noted the nature of their business is a “bit different, so banks need to employ other ways in which they can establish bona fide.”
To this, the regulator added he hopes it’ll be possible to “brings minds together” to “get over this hurdle.” He admitted, however, he sees some aspects of the crypto market as dangerous for investors:
Some of these activities are indeed quite opaque. I would not blame the banks for not opening the bank accounts.
The regulator seemingly isn’t alone, as financial institutions throughout the world have often refused to offer crypto firms banking services over fears their platforms can be used for money laundering and other illicit activities.
Singapore’s Regulatory System for Crypto
According to Bloomberg, Singapore has a regulatory system for the cryptocurrency industry that’s between Japan’s welcoming approach, and China’s crackdown. Its approach has reportedly attracted Tokyo-based messaging giant Line’s crypto exchange Bitbox, and Dunamu, which operates crypto exchange UPbit.
Singapore’s regulatory system, “for the purpose of supervision,” divides cryptocurrencies into three categories. The first is “utility tokens,” which includes cryptos used for purposes like paying for computing services.
The second category refers to digital tokens, which “have the characteristics of securities,” and are governed by the Securities and Futures Act, Menon noted. While no crypto startup has crossed the line on this category, the MAS earlier this year warned eight crypto exchanges they shouldn’t facilitate unauthorized trading of cryptos deemed securities.
The third category reportedly involves payment cryptocurrencies like bitcoin, which Menon said are “highly risky” for investors because of their wild price swings. From a regulatory perspective, however, the MAS is “relaxed,” as payment tokens issued in ICOs “don’t resemble securities.”
If they are not a security, then we don’t have a problem with it. We’ve seen quite a lot of ICO activity that is not security related.
Menon added there a lot of “interesting business models out there” looking to raise capital in “interesting ways.” The regulator has “no issues” with these models, as long as consumers are informed, he said.
Leading cryptocurrency exchange Binance, as reported, has been planning to launch a fiat-to-crypto exchange in Singapore. Per the company’s CEO Changpeng Zhao, beta testing started on September 18.