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Singapore is often considered one of the world’s most open economies, but its relationship with the crypto industry in recent times has been inconsistent. The fintech policy chief believes the city-state will be “brutal and unrelentingly hard” on any bad behavior.
Crackdown on Bad Behavior in Crypto
While speaking to Financial Times, Sopnendu Mohanty, Monetary Authority of Singapore’s (MAS) chief fintech officer, said the focus will be to crack down on bad behavior in the crypto industry and added that the central bank has no tolerance for such market participants.
“If somebody has done a bad thing, we are brutal and unrelentingly hard.”
Needless to say, Terra’s collapse, a foreshock of rapid sell-off this month, has forced regulators to harden their stance on the industry. Mohanty believes the world at large is “lost in private currency,” which is driving the ongoing turmoil in the market.
He admitted that Singapore had imposed a “painfully slow” and “extremely draconian due diligence process” for licensing businesses related to crypto. The chief also said,
“We have been called out by many cryptocurrencies for not being friendly. My response has been: friendly for what? Friendly for a real economy or friendly for some unreal economy?”
Singapore has witnessed the departures of several crypto businesses to the Middle East this year. Many of these entities cited licensing delays and the authorities’ repeated warnings that they do not want retail investors putting funds into crypto because of excessive risk.
Crypto exchanges ByBit, and Binance, as well as hedge fund Three Arrows Capital, abandoned their plans of operating in the country and instead moved to Dubai.
Following the exodus of key market players, Singapore’s Deputy Prime Minister Heng Swee Keat announced the launch of “Project Guardian.” The collaborative initiative aims to foster applications built around asset tokenization and decentralized finance (DeFi). As part of Project Guardian, the MAS will be partnering with top banks, digital asset companies, and digital infrastructure firms.
Three Firms Acquire License to Operate in the Country
Despite the toughened stance, CryptoCom received in-principle approval from MAS for offering payment services within the country.
The latest approval will enable the digital asset exchange to offer numerous settlement solutions within the Payment Services Act, including Digital Payment Token (DPT) services to Singaporean clients. Two other crypto firms – Genesis and Sparrow – also scored the approval to provide similar services.