Finance Authorities of Singapore Call for Stringent Licencing Process for Digital Asset Businesses

Singapore wishes to establish itself as a ‘responsible' hub for crypto activities. In a bid to achieve this goal, the Monetary Authority of Singapore (MAS) has called for very strict verification and licencing processes for entities dealing with virtual digital assets wishing to set up shop in the southeast Asian sovereign island city-state. Singapore's central bank has also joined MAS in suggesting a tough screening process for the businesses that expose people to high-risk assets and could potentially cause major financial damage if left unsupervised.

“The licensing process is stringent. And it needs to be because we want to be a responsible global crypto hub with innovative players, but also with strong risk management capabilities,” said Ravi Menon, the managing director of the MAS, while addressing the subject.

The statements were made by Menon during the Financial Times Crypto and Digital Asset Summit on April 27, Bitcoin.com reported.

The MAS chief noted that cryptocurrencies and other virtual assets do pose the threat of being misused for illicit activities such as terror financing and money laundering among others.

“I think many global regulators share similar concerns about retail exposure to cryptocurrencies,” he added.

In Singapore, Menon said, the track record of licence applicants is thoroughly analysed to see if strong corporate governance structures are in place or not.

Singapore also takes a tough approach on retail investors pouring money on cryptocurrencies in order to curb the risk of big losses.

A recent report has revealed that the total crypto-related crime in 2020 has amounted to around $10.52 billion (roughly Rs. 79,194 crore).

The same report also highlighted that scams and frauds are a major problem, which made for 67.8 percent of the total cryptocurrency crime in 2020.

In January this year, the MAS had published its “Guidelines to Discourage Cryptocurrency Trading by General Public”. The document warns innocent investors against making ignorant decisions.

As of January, over 100 companies applying for licences to operate in Singapore's virtual assets industry were denied permits. Over 170 firms had reportedly applied at the time.

The island authorities, however, do not wish to ban the crypto sector.

In fact, in March, the Singaporean regulators had advised other nations also to enter the cryptocurrency space.

As per a report by research firm TripleA, over 550,000 Singaporeans — making up 9.4 percent of the country's total population — are crypto-owners.

The country's biggest bank DBS Group has also created a platform to facilitate digital token transactions.