Singapore central bank: Bitcoin itself does not need to be regulated

Singapore central bank officials revealed that they have no plans to regulate cryptocurrencies such as Bitcoin and the central bank will maintain an "open mind."

The Monetary Authority of Singapore (MAS), the country’s central bank and financial regulator, will not currently regulate cryptocurrencies, but it expects intermediaries to implement anti-money laundering controls, MAS director general Ravi Menon said.

In an interview with Bloomberg, the central bank governor was asked whether cryptocurrencies such as Bitcoin need to be regulated if Singapore has become a hotbed for initial coin offerings (ICOs), a new form of fundraising that has emerged as a result of cryptocurrencies.

Menon said that only a handful of countries regulate cryptocurrencies.

He said:

We take the position that the currency itself does not pose a risk and does not require regulation. We will continue to monitor activity around this cryptocurrency and assess the most appropriate regulatory approach.

For example, Menon said he hopes that intermediaries involved in cryptocurrency business, such as bitcoin exchanges or trading platforms, will be able to conduct anti-money laundering controls.

The central banker’s views are heartening compared to other government agencies that have been vocal in their denial of cryptocurrencies:

It is a known fact that cryptocurrencies are often used for illegal fundraising activities, so we expect to see AML (anti-money laundering) and CFT (counter-terrorist financing) controls in place. Such requirements apply to activities involving cryptocurrencies, not to the cryptocurrencies themselves.

Menon’s comments were particularly striking when asked about his views on the emergence of cryptocurrencies in society. This year, Bitcoin has attracted mainstream attention, rising from $1,000 in early 2017 to a recent all-time high of $6,200. The official said that the hype surrounding the rise in Bitcoin prices is misleading and does not explore the potential of the cryptocurrency beyond its ability to store value.

He said:

People only see it as an investment tool that will continue to appreciate in value. I think this is misleading for the application of cryptocurrency. Cryptocurrency has great potential for application in certain areas... The value of cryptocurrency is not important, what is important is how it is used.

Can they help migrant workers send remittances home by reducing cross-border payment costs and improving transaction speed and efficiency?

The question Menon raised is representative of the wider adoption of cryptocurrencies.

He continued:

If cross-border remittances can be done through blockchain and with cryptocurrencies, then there will be advantages. This is what should be considered, not whether the price of Bitcoin or Ethereum will rise.

As one of the early adopters of blockchain technology, MAS has invested a lot of resources in testing and developing its own digital currency "Project Ubin". The central bank's project aims to develop and deploy a blockchain-based digital Singapore dollar. Earlier this year, MAS conducted a trial of issuing digital Singapore dollar tokens through the Ethereum private chain.