Singapore Plans No Ban on Digital Currency Trading

Local authorities believe Blockchain technologies could turn out useful, but stay alert to risks.

by Viko
06 February • 2.5 min
In News

Singapore’s authorities do not intend to forbid trading in cryptocurrencies, the country’s Deputy Prime Minister Tharman Shanmugaratnam said on Monday.

The Monetary Authority of Singapore (MAS) has been closely studying the developments in the digital coin markets and the potential risks that arise from the fast-changing crypto world, Shanmugaratnam said in a written answer to questions from parliament members.

“As of now, there is no strong case to ban cryptocurrency trading here. But we will be subjecting those involved as intermediaries to our anti-money laundering regulations,” the response reads.

“And we will keep highlighting to Singaporeans that they could lose their shirts when they invest money in cryptocurrencies,” it adds, highlighting the risks associated with trading in the highly volatile and speculative crypto market.

physical crypto coins with dollar and watch

Shanmugaratnam also underlined the money laundering and terrorist financing risks that the rapidly expanding crypto market poses. Those risks are associated with the decentralized nature and the high level of anonymity of cryptocurrencies, as well as with the limited possibilities for their regulation.

Those risks are also among the reasons why China banned cryptocurrency trading on domestic exchanges and why South Korea is considering similar measures.

“MAS will be imposing anti-money laundering and countering the financing of terrorism (AML/CFT) requirements on the intermediaries that buy, sell or exchange virtual currencies,” Shanmugaratnam wrote.

He noted that the scale of cryptocurrency usage and trading in Singapore is much smaller than in the countries where the crypto is thriving the most - the US, Japan and South Korea. Moreover, the authorities see no considerable connections between cryptocurrency trading and the domestic financial and banking system, which suggests there are no “broader, systemic risk concerns with regard to cryptocurrencies”.

Looking ahead, Shanmugaratnam said Singapore would continue to encourage experiments in related to the Blockchain technology and cryptocurrencies, as it considers that some of these innovations could be economically or socially useful.