MAS keeping an eye on 4 threats to crypto ecosystem
Adapative approach to be taken in addressing these risks.
The Monetary Authority of Singapore is keeping an eye on four threats faced by the crypto ecosystem: money laundering and terrorism financing risks, technology and cyber risks, consumer protection, and financial stability.
MAS Managing Director, Ravi Menon, said the agency is taking an "adaptive approach" to address these risks.
One way the MAS is doing so is by being stringent in the licensing process of institutions offering crypto services.
"We want to be a responsible global crypto hub, with innovative players but also with strong risk management capabilities. We only approve applicants with strong governance structures, fit and proper board and management, and we go through their track record," Menon said.
Eleven digital payment token service providers have been granted licenses or in-principle licenses by the MAS in the last two years, including Paxos, Coinhako, and DBS Vickers.
MAS is regulating digital assets-related services and service providers on an "activity-basis," said Menon.
For example, digital assets used as a means of payment are regulated as digital payment tokens under the Payment Services Act.
"We try to mitigate the specific risks posed by specific activities while allowing latitude for innovation," Menon added.
Meanwhile, regulation has been limited to anti-money laundering, technology risk, and access to retail public for digital payment tokens service providers.
"We have taken quite a tough line on unfettered access to retail public because retail investors should not be dabbling in cryptocurrencies. Many global regulators share similar concerns about retail exposure to cryptocurrencies." Menon said.