Singapore’s Pragmatic Approach to Cryptocurrency is Drawing Business to the Country
Over the last year, many cryptocurrency companies have set up shop in Singapore because of the clarity in regulation in the country. However, ComplyTech CEO, Michael Farah, believes that the newly announced regulatory framework could open up the discussion to more stringent regulation that could suppress activity, as reported by Payment Week, October 22, 2019.
Potential to Become a Global Hub
All across the globe, we are seeing sovereign regulators fight against cryptocurrency with thinly veiled threats and lawsuits. Most governments are waging an internal war on cryptocurrencies, but some truly see the value proposition; one of those happens to be Singapore.
From the Litecoin Foundation to Binance, many stalwarts of the space have set up shop in Singapore. This simply boils down the clarity in regulation; there are still AML frameworks and many regulations to follow, but at least these companies know they can legally operate once they complete the formalities.
Earlier this year, Singapore waived sales tax on digital payment tokens which was beneficial to the companies and citizens. This set in place the narrative that Singapore is rapidly developing into a hub for blockchains and crypto, rivaling Switzerland’s Zug Valley.
Singapore has promised new legislation regarding cryptocurrency by the end of the year. So far the only information is that the AML and counter-terrorist financing norms will be strengthened, and all payments businesses will require a license to operate.
Potential Negative Fallout
Some people actively involved with the Singapore blockchain space have interpreted this new legislation negatively.
There is no concrete agenda that the government has spoken of, so people have left the door open to autocratic legislation like that of China and India. In this case, Michael Farah believes the Singapore cryptocurrency industry will wither away.
Singapore’s government said they expect crypto payments businesses to be licensed as per the incoming regulation. This alone infers they aren’t planning an outright ban of any sort. At worst, they will impose regulations that severely reduce the scope of this technology.
Governments are liable to change their minds frequently – India went from regulation friendly to the wielder of the ban hammer, as did many other countries once they saw the 2017 bubble. So once again, the negative outlook cannot be ruled out, albeit it is improbable.
