Singapore's Monetary Authority Acknowledges Blockchain's Potential for Cross-Border Transfers

Sopnendu Mohanty, the Chief Fintech Officer at the Monetary Authority of Singapore (MAS), the country’s financial regulator, has stated that blockchain technology could potentially expedite cross-border transfers. Mohanty, a former senior executive at Citigroup, also noted that “he does not see much” potential in central bank digital currencies (CBDCs).

Regulators Began Exploring Blockchain Use Cases In 2016

Mohanty, whose comments came during the Blockchain in Business event held on May 2 at the Massachusetts Institute of Technology (MIT), pointed out that in 2016, lawmakers were not familiar with the various benefits or use cases for distributed ledger technology (DLT).

A couple of years ago, the MSA began experimenting with several blockchain-based solutions, Mohanty revealed. At the time, officials at the MSA had been conducting various tests in order to better understand how DLT-enabled platforms can be used to settle transactions.

Central Bank Digital Currencies May Not Be Useful

According to Mohanty, the staff members at the MSA have now learned how to use blockchain tech to potentially improve several routine business processes. For instance, MSA’s staff has worked on projects which involve using DLT to manage payments in the banking sector. They’ve also explored how blockchain-based payments can be settled against securities and how the distributed ledger can be used to perform cross-border transfers.

As mentioned, Mohanty and his colleagues were not able to find a legitimate use case for central bank digital currencies (CBDCs) in a typical retail economy.

While speaking at the Blockchain for Business event, Mohanty noted that Canada and Singapore’s central banks had already used blockchain-powered solutions to transact in digital currencies. Commenting on the initiative, Mohanty remarked:

The next wave of central bank blockchain projects can make further progress by bringing technology exploration together with policy questions about the future of cross-border payments.

Cryptocurrencies Aren't Considered Legal Tender

In January 2019, the MAS issued a warning regarding false statements, which had allegedly claimed that Singapore’s central financial institution was planning to launch its own cryptocurrency. In its warning letter, Singapore’s law ministry had also outlined the major risks associated with dealing cryptocurrencies - including their relatively high volatility and their potential to be used to financial illicit activities.

As noted by the nation’s law ministry, cryptocurrencies are not considered legal tender in Singapore. The Asian country’s residents were also advised to exercise caution when engaging in cryptocurrency-related transactions - presumably due to the large number of scams associated with them.

Malta's Financial Watchdog Warns Against Two Cryptocurrency Exchanges

Malta’s financial watchdog, the Malta Financial Services Authority (MFSA), has issued statements against two cryptocurrency trading platform that reportedly don’t have licenses to operate in the country.

The MSFA, over two warnings, warned against both Crypto Foxtrades and COINMALEX.0 In the first warning the financial watchdog wrote it was aware Crypto Foxtrades claims to be “a licensed and regulated trading platform that serves over 500,000 customers globally,” and that it purports to be “licensed and regulated” by the MFSA.

The regulator warned the public against “undertaking nay business or transaction” with the entity operating Crypto Foxtrades, writing:

The MFSA wishes to alert the public, in Malta and abroad, that Crypto Foxtrades is NOT a Maltese registered Company NOR licenced or otherwise authorised by the MFSA to provide the service of an exchange or other financial services which are required to be licenced or otherwise authorised under Maltese law.

The second warning saw the MFSA write that it has become aware of COINMALEX, which claims to offer “trust assets management of the highest quality on the basis of profitable CryptoCurrency trading through Crypto exchanges”.

The organization states it operating from Malta, but the MFSA issued a similar warning to the public against using it as it isn’t licensed or authorized to operate in the country, clarifying it “does not believe” it operates from an address in Malta.

The MFSA added.

Furthermore, information available to the MFSA suggests that COINMALEX is likely to be a scheme of dubious nature with a high risk of loss of money.

On both warnings, Malta’s financial watchdog advised the public to be “extra cautious” when the entity offering financial services approaches them “via unconventional channels such as telephone calls or social media.

Earlier this year, the MSFA said leading cryptocurrency exchange Binance wasn’t authorized to operate in the country. On social media its CEO Changpeng Zhao responded saying to reports on the statement from the MFSA saying there was a “mix of truth, FUD & misconception” circulating.

Featured image via Pixabay.