While other Southeast Asian countries like Japan, China, and South Korea are tightening their regulations around cryptocurrency, the government in Singapore wants to take some time to observe the evolution of the market before making any decisions on the matter. This, coming from the country’s Deputy Prime Minister, who says that it’s still too early to interpret the implications that virtual currencies will have on Singapore’s financial system.
Currently, trade volume involving cryptocurrency is still not significant enough to have any major effect on Singapore’s economy. As a result, the country does not believe that its financial system is under any threat. In addition, cryptocurrency is still in somewhat of an experimental phase and it’s still too early to see whether virtual currencies will succeed in the country or not. Singapore has even been encouraging companies and developers to experiment with Blockchain technology to see what it has to offer.
Despite the country’s passive-aggressive stance on digital currency, Deputy Prime Minister, Tharman Shanmugaratnam has made it clear that the government is carefully monitoring any potential risks through the country’s Monetary Authority, the MAS.
In Singapore, all financial institutions are regulated by the same laws and there is currently no distinction between criminal activities using cryptocurrency or crimes using fiat currency. Therefore, in the absence of any specific legislation, the MAS has decided against a ban on digital currency. However, the agency is still vigilant and screens any transactions that are deemed to be suspicious.
Virtual Money and Its Socio-Economic Implications
According to Shanmugaratnam, virtual currency can be used in two different ways. First, it can simply be a used as a method of payment and secondly, it can be used as investment assets. And, of the two, the latter has become the more popular options in the country.
Therefore, Singapore has deemed cryptocurrency to be potentially useful in terms of commercial trade payment by using its underlying Blockchain technology.
A Positive Environment for Crypto Companies
The recent restrictions and regulations put in place by other Asian countries have pushed several companies to seek more favorable environments for their operations. As a result, Singapore’s lax regulations about digital currency have made it an oasis for companies that are seeking shelter from the storm. This only goes to reinforce the country’s position as a leader in the world of crypto-finance.
More so, BITMAIN, one of China’s leading mining operations is currently making plans to open a regional headquarters in Singapore to try and circumvent the Chinese restrictions on cryptocurrency.