Crypto Startups To Gain Banking Services-The Monetary Authority of Singapore (MAS), Singapore’s defacto central bank and regulator, has backed domestic cryptocurrency startups and exchanges to receive banking services as part of the country’s efforts to boost fintech development.
the Managing Director of MAS, Rajiv Menon, said that even though Singapore will not be an extremely Tax regulatory environment. In order to attract cryptocurrency businesses. That their central bank is working to bring together banks and digital-currency fintech startups together to see if there is any collaboration that can be reached.
This approach of Singapore’s central bank is quite the contrast to countries such as India, where the central bank has forced all regulated financial institutions – including banks – to cease offering services to cryptocurrency firms. The Indian central bank’s move has detrimentally impacted the industry. Recently leading to the closure of Zebpay, which was one of India’s biggest cryptocurrency exchanges.
Singapore has been pushing to develop its fintech sector in order to create more jobs and diversify its economy. Even though the country’s regulators have taken a rather cautious approach to exchanges and other companies of the booming crypto industry.
Menon added that a major issue currently facing Singapore-based crypto startups is that traditional banks are reluctant to open bank accounts for them. Because some aspects of the industry appear “obscure and dangerous” to both regulators and financial institutions. The nature of crypto-business is indeed a bit different, so banks will need to employ other ways in which they can establish bona fide.
Currently, Singapore won’t be following the Japanese Model
Crypto Startups To Gain Banking Services-Menon further said the central bank currently has no intention to employ a licensing scheme for crypto exchanges as its Japanese counterpart has done – assigning licenses to 16 Japanese exchanges so far, in part to help them obtain banking support. What it has done is to divide cryptocurrency activities into three separate categories. In order to supervise each sector more efficiently.
According to Menon:
1) the first category comprises of utility tokens, and it needs almost no regulation.
2) the second category involves digital coins that share some characteristics with securities. Those are governed by the Securities and Futures Act. Bloomberg reported that very few ICOs have crossed that boundary and operate successfully within the category.
3) the third group involves payment tokens such as Bitcoin. However, as it turns out, the MAS doesn’t have a problem with the category, despite marking the tokens as “highly risky.”
“If they are not security, then we don’t have a problem with it. We’ve seen quite a lot of ICO activity that is not security related,” Menon told the publication. “And there’s a lot of interesting business models out there trying to raise capital in interesting ways. Which as far as the consumers are aware of what these are, we have no issues.”
The positive ecosystem for cryptocurrency firms has drawn the attention of firms like Upbit. South Korea’s largest cryptocurrency exchange, which established a new cryptocurrency exchange in Singapore last month. Binance, the world’s largest cryptocurrency exchange by trading volume, also announced plans to launch a fiat cryptocurrency exchange in Singapore.