Regulatory uncertainty in the world’s two largest economies (the US and China, respectively) has stifled cryptocurrency adoption. Singapore, however, has been moving swiftly to ensure cryptocurrency and blockchain-related projects receive basic banking services. This past week, Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS), announced that Singapore’s central bank is actively “[bringing] the banks and cryptocurrency fin-tech startups together to see if there’s some understanding they can reach,” according to Yahoo! Finance.
Menon mentioned, however, that the ongoing discourse of bridging Singapore’s banking industry and cryptocurrency space was not an effort to only attract crypto startups. There will also be no effort to issue cryptocurrency-exchange licenses (similar to what Japan has done) to aid in facilitating banking support. Singapore is taking a calculated, prudent approach to best integrate the cryptocurrency space with its existing financial and technology industries.
Singapore competes with Malta and Switzerland, two jurisdictions that passed pro-cryptocurrency regulation throughout 2018. By-and-large, they’ve encouraged crypto startups to incorporate their businesses there. In July 2018, the Maltese Parliament officially passed 3 bills into law, spearheading the regulatory movement for cryptocurrencies. In July 2018, FINMA, Switzerland’s financial market supervisor, held discussions with the bankers’ association to make banks more accessible to cryptocurrency ventures, according to Reuters.
The Singaporean central bank is clearly devoting resources for pro-crypto regulation. Only time will tell, but the Monetary Authority of Singapore has potential to create a regulatory framework for other countries to follow suit. That regulatory framework could be a guideline for other financial institutions to create a more operational, streamlined and secure way to fund crypto-startups within various jurisdictions. In an industry where legal boundaries are blurred, Singapore is also setting itself up as a fin-tech leader for crypto startups to incorporate and register their operations.