Monetary Authority of Singapore will help cryptocurrency firms with local bank accounts, says Ravi Menon

Ravi Menon, the Managing Director of Monetary Authority of Singapore [MAS], said that the financial regulator is ready to help cryptocurrency firms which are finding it difficult to set up local bank accounts.

Conversely, he stood steadfast in MAS’s decision to not loosen regulations on cryptocurrencies so as to curb the blooming of new cryptocurrency startups in the country. Menon said:

“What we are trying to do is to bring the banks and cryptocurrency fintech startups together to see if there is some understanding they can reach.”

Cryptocurrency firms in the country have been long claiming that their daily operations were being hampered due to the tight regulations set by MAS.

To create more jobs and diversify the financial sector, Singapore had opened its economy for the development of the fintech sector. Nevertheless, to be cautious of the new players in the market and to reduce the chances of fraud, the financial regulator had imposed a lot of restrictions, significantly hindering operations of cryptocurrency firms in the country.

One of the major problems that cryptocurrency firms were facing was the difficulty in opening local bank accounts, with many registering complaints with the regulatory body over the same issue.

Menon added that reaching a consensus on regulations in the cryptocurrency sector was crucial as the domain is largely different from traditional markets.

According to the finance expert, banks will have to come up with new strategies to deal with the industry. He added:

“I hope we can bring minds together on this so that we can get over this hurdle.”

He also supported the caution exercised by the banks currently as the “the crypto industry remains obscure and dangerous for investors”. Crime such as money laundering and frauds using cryptocurrencies were the factors making adoption difficult for banks, he concurred.

The MAS official said that Singapore has no plans to license cryptocurrency exchanges similar to the manner adopted by Japan.

Japan, welcoming cryptocurrency players to the country, had deployed a licensing model. Under this, all new exchanges had to register with Japan’s Financial Services Agency.

For supervision, Singapore uses a different method; they categorize all cryptocurrency activities into three categories.

The first is called utility tokens and used in blockchain technology for purposes including payment for computing services. These need almost no regulation, according to Menon.

The second involves digital tokens that have characteristics of securities. These are governed by the Securities and Futures Act, he added.

The third model involves payment tokens, such as Bitcoin, and their volatility. Menon said:

“If they are not a security, then we don’t have a problem with it. We’ve seen quite a lot of ICO activity that is not security related,” he said. “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.”