Currency regulation varies greatly around the world: China has suppressed large volumes of cryptocurrency in recent months, while Japan has only recently allowed investment funds that specialize in cryptocurrency. On the other hand, El Salvador accepted Bitcoin (BTC) as legal tender.
As financial centers around the world seek to regulate this sector, Singapore is seeking to strengthen its position as the global capital of cryptocurrency-related institutions. According to Ravi Menon, CEO of the Monetary Authority of Singapore (MAS), the debtor country would have been left behind if it hadn’t gotten a head start on how it handles cryptocurrency.
“With cryptocurrency-based activities, this is essentially an investment in the future, and the shape is unclear at this point,” said Menon, who led MAS for about 10 years.
The country is at the forefront of this movement due to its openness to cryptocurrencies, having developed legislation that favors their use. The tax system has also been changed to stimulate industry growth.
According to Menon, MAS is enforcing “very tight regulation” to enable companies to meet their requirements and address multiple threats to their operations.
Menon said Singapore must strengthen security measures to counter threats such as illegal flows. The city-state has become a magnet for crypto companies, from Binance Holding, which has had a series of disputes with regulators around the world, to the American operator Gemini, targeting institutional investors.
Since the entry into force of the Payment Services Law in January 2020, 170 companies have applied for an MAS license, bringing the number of applicants to around 400.
Since then, only a handful of crypto companies have received the coveted licenses, two of which have been refused. About 30 applicants withdrew their applications after contacting the organizer.
One of the licensed organizations was DBS Group, the largest bank in Singapore and a pioneer in creating a digital token trading platform and offering tokenization services, Cointelegraph reports. Banks and other government-owned technology companies such as OCBC and IBM have also joined.