Is Singapore becoming less favourable as a crypto haven?

With Singapore recently passing a bill to require crypto companies based in the country to obtain a special licence in order to service overseas clients, other jurisdictions such as Dubai have suddenly become more attractive.

The legislation, known as the Financial Services and Markets Bill (FSM), will require crypto companies based in Singapore to acquire a special licence in order to do business with companies overseas.

According to an article on Business Insider India, the bill will particularly impact crypto companies that have arrived in Singapore in order to escape regulatory issues in their own countries, such as those from India.

Also, it could be argued that Singapore’s new ruling could set a precedent for other countries who may want to profit from business that is being done with nations outside of their borders.

It does look like Singapore is starting to become rather less favourable to crypto platforms in general. The Monetary Authority of Singapore (MAS) is now equipped with more powers to regulate crypto companies that are exclusively serving overseas markets from their Singaporean base.

Alan Tan, board member at the MAS said of the new bill:

“We could be exposed to reputational risks brought by digital token service providers created in Singapore, and which provide services relating to virtual assets such as Bitcoin outside Singapore. The FSM Bill seeks to mitigate such risks by licensing these players and imposing AML/CFT requirements on them.” 

The MAS has now taken a much stronger stance on cryptocurrencies, and although it admits that some of the technological use cases are very innovative and compelling, it does not believe that crypto is a safe place for the average retail investor.

Loo Siew Yee, assistant managing director of MAS, said of blockchain and crypto:

“MAS strongly encourages the development of blockchain technology and innovative application of crypto tokens in value-adding use cases. But the trading of cryptocurrencies is highly-risky and not suitable for the general public. DPT service providers should therefore not portray the trading of DPTs in a manner that trivialises the high risks of trading in DPTs, nor engage in marketing activities that target the general public,”

Opinion

It does seem a shame that the MAS has taken this stance towards cryptocurrency investment. This particular line is one that many other countries are also following, and access to crypto is becoming more and more difficult for the average retail investor.

It must be acknowledged that the “highly risky” investments referred to by the MAS certainly do exist, but given the choice between remaining with your currency in the bank, and the chance to invest in some of the more reliable opportunities in crypto, particularly in the DeFi sector, many investors would definitely want to take this risk.

Therefore it is to be hoped that alternative jurisdictions, that are much friendlier to crypto and the small investor, such as Dubai, will continue to abound and to flourish in the incredibly innovative world of blockchain and cryptocurrency.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.