Is Singapore still respectful of cryptography? How the new rules will affect investors – Wired PR Lifestyle Story

A few months ago, a friend of mine decided that he would eventually invest in cryptocurrencies.

That morning, he read about the meteoric rise of the Shiba Inu token. He had the opportunity to become a millionaire overnight, or anyone else. At noon, he created a Crypto.com account, completed Know Your Customer (KYC) checks, and purchased 1.5 million Shiba Inu coins.

Singapore is on the short list of countries where buying cryptocurrency is so easy.

As of today, there are nine countries that have banned cryptography completely, China is one of them. There are another 42 with a partial ban on how cryptography can be used.

At the same time, there are so many other countries in the limbo today. For example, both Russia and India are considering regulations that do not look very closely at blockchain technology.

Why is cryptocurrency regulated?

Simply regulating cryptocurrency is a matter of balance. The promise of innovation is to measure financial instability and the risk of crime.

With China leaning to the far right, Singapore has gained a lot at the other end of the spectrum. In recent years, the country has emerged as a cryptocurrency hub in Asia – largely due to the free reign that companies have had while experimenting with blockchain technology.

Moreover, Singapore’s overall stance on cryptocurrency remains consistent. Despite times of high volatility and speculation, the Singapore Monetary Authority (MAS) has acknowledged the potential benefits of blockchain technology along with its risks.

Take 2017 for example. Following Bitcoin’s unprecedented trajectory over the year, China has banned financial institutions from facilitating crypto transactions. Egypt, meanwhile, considered cryptocurrency to be an illegal currency.

These decisions may have saved retail consumers from making risky investments, but they came at the expense of innovation.

On the other hand, MAS only issued warnings, as it has continued to do for years. Retail investors were advised not to treat cryptocurrencies as an investment asset due to unexpected changes in value. However, they were not prevented from investing if they were still comfortable.

Blockchain companies have had similar freedoms while working in Singapore; freedom to continue the operation while the MAS deliberates on the way forward. Even today, these companies are allowed to act exceptionally while seeking a license under the Payment Services Act.

Why did Singapore introduce cryptographic licenses?

Singapore has not enacted any new laws to regulate cryptocurrencies.

In contrast, the MAS space is being regulated in accordance with current Securities laws. This is because some digital tokens are now being used for the same purpose as traditional securities, such as equities and mutual funds.

By combining traditional and digital values, MAS can maintain the standard of security and protection that retail investors need to be given.

Under this standard, cryptographic exchanges must have the necessary resources to maintain the required amount of capital and to protect assets. These clauses, among other things, can help prevent fraud in the cryptocurrency space in recent times.

Does this make Singapore less crypto-resistant?

It depends on how you look at it. On the one hand, these regulations make it more difficult to create a business that deals with digital values.

A December 2021 report revealed that there were orders from more than 100 such companies (out of 176). Withdrawn or dismissed by MAS.

Among those companies was Binance, the world’s largest cryptocurrency exchange in terms of daily trading volume. Binance’s move out of Singapore prompted talks about the country’s lack of a cryptographic paradise that once existed.

But that is not necessarily true. Singapore seems to be less respectful of cryptocurrencies and scams, not the cryptocurrency itself. The Securities Regulations apply only when necessary. Exchanges that do not intend to trade in digital securities are free to operate as they are.

For clarification, digital securities refer only to cryptographic tokens that represent ownership of an underlying asset or serve as a way to claim debt.

The most popular cryptocurrencies like Bitcoin and Ethereum do not fall into this category. MAS has been careful not to interfere with the cryptographic space as a whole, in an effort to regulate part of it.

From the point of view of retail investors, Singapore remains as crypto-resistant as ever. It’s easy to create a wallet, buy coins and access everything the blockchain has to offer.

Apps like Crypto.com also offer their own debit cards that can be used for everyday purposes. Users can earn cashback in the form of cryptocurrency and can instantly convert it into cryptocurrency and fiat money.

If so, these new regulations could encourage more people and businesses to start adopting cryptography. Relieving concerns about investment security, they will now be free to diversify their savings without worries.

Featured Image Credit: AZCoin News