Singapore’s central bank, the Monetary Authority of Singapore, recently acknowledged that authorities are closely monitoring Bitcoin and other digital use, as well as initial coin offerings (ICOs). The revelation came from Deputy Prime Minister Tharman Shanmugaratnam, in a formal response to a question posed in Parliament by MP Miss Cheng Li Hui. The MP’s question sought information about how the government is currently responding to digital currency:
“To ask the Prime Minister (a) whether the Government is keeping track of the use/investment of crypto currencies such as bitcoin in Singapore; (b) how do crypto currencies affect our finance industry; (c) whether studies are being conducted to assess the problems and risks of using/investing in crypto currencies; and (d) whether regulatory frameworks are necessary in the future.”
In his response, the Deputy Prime Minister noted that the government is aware of digital currencies like Bitcoin, and has been monitoring their use. According to Shanmugaratnam, there are roughly 20 retailers in Singapore currently accepting Bitcoin, and little use of cryptocurrency within the financial sector. Moreover, trading in Singapore is largely speculative, and trading volumes are low “compared to other countries such as US, Japan and Hong Kong.”
The response addressed regulation and ICOs as well. The Deputy Prime Minister said that the MAS does not directly regulate digital currencies, but does exercise regulatory power when crypto activities fall into the Authority’s regulatory orbit. Two examples were cited: the risk that digital currencies might be used for terror financing or money laundering, and ICOs.
Shanmugaratnam confirmed that the MAS is currently developing a "new payment services regulatory framework” to deal with potential money laundering and terror financing risks. He also noted that the central bank views ICOs as “financial activities that falls under MAS’ regulatory ambit” – which is why the central bank now requires ICOs to comply with Singapore’s securities laws.