The Central Bank of Singapore wants to become a responsible global crypto hub. To make this possible, they want to have strict licensing and regulatory processes in place. They are going to support crypto innovation and companies but will also have “strong risk management.” I think this is the first we are hearing that a central bank of a major nation wants to dabble with crypto. However, it’s not all great, as we will see below.
Singapore to become a responsible global crypto hub
There have always been concerns regarding the wrong use of cryptocurrencies like money laundering, terrorism financing, ransom extraction, and more. Singapore’s central bank chief is also concerned about the same. Therefore, he talked about the strict licensing process they have. It’s not to stop innovation but to manage the risks that come along the way.
The fact that they have been overly cautious is shown by the percentage of the approved applications. The authorities have received nearly 170 applications and 100 of them have already been rejected. At the same time, only a very small fraction has been approved. Companies that have strong governance structures and are familiar with AML, terrorist financing risks were approved.
Outlook on retail investors
The central bank is unsure how to deal with retail investors in the crypto space. They are worried that the idea of retailers dealing with crypto isn’t that good. At the same time, they think global regulators also have the same concern. So, it will be essential to see how they manage this part of the industry. For now, things are not looking that great. The Monetary Authority of Singapore has issued a statement saying that “the trading of cryptocurrencies is highly risky and not suitable for the general public.”
I am unsure how Singapore plans to become a global crypto hub if they discourage retail investors from getting into crypto. A better approach could have been to educate investors to understand the risks and pitfalls of the industry.
What do you think the Central Bank of Singapore means when it says it wants to become a responsible global crypto hub? And do you think that their approach for retail investors will work? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.