Singapore’s financial regulator is willing to lend a hand to cryptocurrency firms having problems setting up local bank accounts, but doesn’t plan to loosen its rules to lure more crypto startups to the country.
“We should not be trying to create an extremely lax regulatory environment in order to attract that kind of business,” Monetary Authority of Singapore Managing Director Ravi Menon said Tuesday when discussing the crypto industry in an interview with Bloomberg News. “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.”
Singapore has been pushing to develop its financial technology sector as a way of creating jobs and diversifying the economy, while taking a cautious approach to exchanges and other aspects of the cryptocurrency industry. Some crypto firms have complained that there’s a regulatory vacuum that hampers their Singapore operations because they are unable to open local bank accounts, or have had their accounts closed.
“The nature of this business is a bit different, so banks may need to employ other ways in which they can establish bona fide,” Menon said. “I hope we can bring minds together on this so that we can get over this hurdle.”
However, he warned that many aspects of the crypto industry remain obscure and dangerous for investors, and so it’s right for local financial firms to exercise caution. “Some of these activities are indeed quite opaque. I would not blame the banks for not opening the bank accounts,” he said.
Lenders around the world have often steered away from providing services to crypto firms because of worries about the use of digital coins in money laundering and financial crime.
Singapore’s regulatory system for crypto lies somewhere between Japan, which has taken a welcoming approach, and China, which has issued an outright ban on exchanges and initial coin offerings. Among those attracted to Singapore this year are Tokyo-based Line Corp., Japan’s biggest messaging service, and Dunamu, which operates Korean cryptocurrency exchange Upbit. Line, which started its Bitbox exchange in July, has seen trading volumes amounting to more than $10 billion in the first two months, according to a Bitbox spokesman.