Singapore says embrace crypto or risk being ‘left behind’

Singapore is seeking to cement itself as a key player for cryptocurrency-related businesses as financial centres around the world grapple with approaches to handle one of the fastest-growing areas of finance.

“We think the best approach is not to clamp down or ban these things,” said Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), which regulates banks and financial firms.

Nations differ vastly when it comes to how they handle crypto: China has cracked down on large amounts of activity in recent months, Japan only recently allowed dedicated crypto investment funds – though El Salvador has embraced Bitcoin as legal tender. In the United States, while there are many options for investing in the burgeoning asset class, regulators are concerned about everything from stablecoins to yield-generating products.

Instead, MAS is putting in place “strong regulation”, so firms that meet its requirements and address the multitude of risks can operate, he said in an interview.

The stakes are high for the small island nation, which has already earned a reputation as a global wealth hub. Singapore must raise its safeguards to counter risks including illicit flows, Menon said.

The city-state is “interested in developing crypto technology, understanding blockchain, smart contracts and preparing ourselves for a Web 3.0 world”, he said, referring to the third generation of online services.

Singapore is not the only place with crypto ambitions. Locations as diverse as Miami, El Salvador, Malta and Zug in Switzerland, are also making efforts. It can be a fine line to tread, given the crypto industry grew up with few regulations, so many players baulk at government officials’ attempts to impose guardrails.