Cryptocurrencies, or virtual currencies including, perhaps most famously, bitcoin, have come into prominence of late, with market capitalizations soaring and stories of overnight millionaires flooding media sites.
However, its inherent volatility in an unregulated market and lack of investor protection have led to many detractors warning against it.
Last month, Deputy Prime Minister Tharman, who also doubles as Chairman of the Monetary Authority of Singapore (MAS), Singapore’s central bank, stated that Singapore had no strong reason to ban cryptocurrencies.
This is in line with Singapore’s aim to establish itself as a pre-eminent fintech hub and a pioneer in latest developments.
In a statement on Thursday (1 March), MAS added that it was currently assessing if additional regulations would be necessary to protect investors in cryptocurrencies.
Currently, exchanges in Singapore are unregulated, but the big G has called for “extreme caution” and warned of the volatility over investments in cryptocurrecies.
However, anti-money laundering laws are in place for intermediaries providing virtual currency services, most of which are cryptocurrency exchanges based in Singapore.
“We are assessing if additional regulations are required in the area of investor protection,” Ong Chong Tee, deputy managing director (Financial Supervision) of MAS said on Thursday.
Other countries such as the USA and South Korea where cryptocurrency trading is popular are looking for methods to regulate it, an endeavour which would no doubt prove challenging for all parties involved.
Singapore firms, on the other hand, are quite eager to harness the potential of these new technologies: