Singapore is often considered one of the most open economies in the world, but its relationship with the crypto industry has been inconsistent in recent times. The fintech policy chief believes the city-state will be “brutal and incredibly harsh” on any bad behavior.
Action on Bad Practices in Crypto
Speaking to the Financial Times, Sopanendu Mohanty, Chief Fintech Officer of the Monetary Authority of Singapore (MAS), said that the focus will be on cracking down on bad behavior in the crypto industry and added that central banks have no tolerance for such market participants.
“If someone has done a bad thing, we are cruel and relentlessly harsh.”
Needless to say, Terra’s collapse, a foreshadowing of a sharp sell-off this month, has forced regulators to toughen their stance on the industry. Mohanty believes that the world at large is “lost in private currency”, which is driving the ongoing turmoil in the market.
He acknowledged that Singapore had implemented a “painfully slow” and “extremely rigorous process” for licensing crypto-related businesses. The chief also said,
“We have been called out by many cryptocurrencies for not being friendly. My response has been: Friendly for what? Friendly for the real economy or Friendly for an unreal economy?
Singapore has seen the departure of many crypto businesses to the Middle East this year. Many of these entities cited delays in licensing and repeated warnings from authorities that they do not want retail investors to pour money into crypto because of the high risk.
Crypto exchanges Bybit, and Binance, as well as hedge fund Three Arrows Capital abandoned their plans to operate in the country and moved to Dubai instead.
Following the exodus of major market players, Singapore’s Deputy Prime Minister Heng Swee Keat announced the launch of “Project Guardian”. The collaborative initiative aims to promote asset tokenization and applications built around decentralized finance (DeFi). As part of Project Guardian, MAS will partner with top banks, digital asset companies and digital infrastructure firms.
Three firms licensed to operate in the country
Despite the tough stance, Cryptocom received in-principle approval from MAS to offer payment services within the country.
The latest approval will enable the digital asset exchange to offer Singapore customers multiple settlement solutions within the Payment Services Act, including digital payment token (DPT) services. Two other crypto firms – Genesis and Sparrow – also received approval for providing similar services.
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