Singapore’s financial regulator and central bank have pledged to be “brutal and relentlessly tough” on any “bad behavior” by the cryptocurrency industry.
The comments come from the Monetary Authority of Singapore (MAS) fintech director, Sopnendu Mohanty, explaining in an interview that “if someone has done a bad thing, we are brutal and relentlessly tough.”
He also hit back at rhetoric from some crypto market participants who criticized the regulator for not being crypto-friendly enough, and instead questioned the legitimacy of the market, saying:
“We have been called out by many cryptocurrencies for not being friendly, my response was: friendly for what? Friend for real economy or friend for unreal economy?”
The fintech chief believes the world is ‘lost in private currency’ and is the cause of the wider market turmoil. Mohanty added that the city-state adopted an “extremely draconian” and “painfully slow” due diligence process for licensing crypto businesses in response to the regulator’s conservative stance on crypto.
Singapore introduced licensing for crypto businesses in January 2020 and has been strict on which companies are approved for licensing. TNZT reported in December 2022 that the MAS had rescinded the approvals of more than 100 business licenses that had applied.
In January, cryptocurrency providers were banned from advertising their services in public spaces such as public transport, which extended to public websites as well as print media, broadcast and social media.
The MAS is also expanding its ability to police crypto businesses. In April, the regulator passed new requirements for companies to obtain a license and be subject to anti-money laundering and anti-terrorist financing requirements if they wanted to provide services outside the country.
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Many crypto businesses have sprung up in Singapore due to both its low taxes and the perception that the city-state was one of the most crypto-friendly, but regulatory tightening suggests that is changing as the country is focusing on its central bank digital currency (CBDC).
On June 21, payment systems provider, Mojaloop Foundation opened a CBDC Center of Excellence (COE) in Singapore which sees MAS in its task force and Mohanty as an advisor to the board.
With the opening of the COE, Mohanty believes an alternative state-backed cryptocurrency could be launched within three years.
The COE aims to reduce the costs and inefficiencies of payment platforms and cross-border payments, Mohanty said he welcomed the move as a “step forward into the future of financial services”.