Singapore has long been considered a leading financial epicenter of the world because of its innovation and welcoming embrace of new business and international relations. Just in 2021, the city-state’s economy expanded 7.2%, the most it has ever experienced since 2010, and that is directly after dealing with the repercussions of the global pandemic. This growth is projected to continue and is a paramount reason many in the financial world view Singapore as a leader.
It should be no surprise that this type of economic resiliency is attractive to many in the cryptocurrency industry. Those early adopters have flocked to the busy streets of Singapore in an effort to solidify their market share and grow their different tokens, coins, and blockchain-based business ventures.
While the Monetary Authority of Singapore (MAS) would typically be thrilled to have such new business enter the territory, they have instead outlawed the use of cash-to-crypto terminals, including crypto ATMs. The reason for this crackdown is simple, the current leadership of the MAS believes crypto, or digital currency, should not be encouraged. This is because it could disrupt the strength of local currency exchange and international business relations.
This call to eliminate terminals that work with blockchain technology came on January 17, 2022, when a new order was announced to prevent digital payment token or cryptocurrency service providers from any public marketing and advertising campaigns. This includes creating public websites, social media posts, broadcasting, or anything else that would promote their business ventures, including physical ATMs.
MAS believes that access to such physical DPTs (digital payment tokens) through ATMs presents a risk to the general public because it could mislead by not showing enough of the potential risk. MAS views this issue as dangerous, saying, “the trading of cryptocurrencies is highly risky and not suitable for the general public.”
Luckily crypto service organizations and businesses can still leverage corporate websites, apps, or social accounts to promote their services, but they must be clear with the potential risks of investing in blockchain-based technology.
This creates a much stricter business environment due to the tighter regulations on crypto and its future within Singapore. As more countries around the world begin to embrace the use of crypto for everyday purchases and, in some cases, have created state-led cryptocurrency tokens, Singapore risks falling behind at a critical moment when its economy is not only welcome to the table of international trade, but sitting close to the head.
As of right now, MAS has allowed only 3 of the more than 170 crypto companies wishing to obtain a DPT license to do business in the public. Some businesses that were already established prior to the policy change have been allowed to remain in operations until the outcome of their application is decided.
The Shift to International Outlets
As Singapore begins to restrict the use of crypto-based businesses, more of these innovators will continue to seek countries and regions with more welcoming policies. An example of this shift is the popular crypto exchange Binance.
Instead of trying to win over MAS regulators, they have moved their operations to Dubai to build a new international hub. This doesn’t mean crypto exchanges are banned from Singapore – check ROSHI to see what exchanges are still around.
More are following suit. Businesses like BigOne Exchange, headquartered in the Netherlands, are actively excited Singapore for other locations around Asia, Europe, and the Middle East. In the UAE (United Arab Emirates), more than 40 multidisciplinary free trade zones are fertile ground for crypto and blockchain-based businesses to create new ventures.
This view by MAS that crypto presents a risk to the everyday consumer, however good intended, places a risk on the overall economy of lost revenues and business startup investment that could create jobs and housing opportunities. Adapting to such technology may just be another way for Singapore to lead the charge in economic growth factors.
The problem remains that because crypto tokens are not anchored on any physical economic fundamentals, they could be subject to sharp speculative swings. MAS and other government financial institutions are opting on the side of cautionary activity when it comes to cryptocurrency.
Hopefully, the future will see a brighter outlook by Singaporean officials towards Blockchain technology. We are facing a tipping point to the mass adoption of cryptocurrencies. Not taking advantage of new potential revenue seems a hotly debated miscalculation. It would be unfortunate to see other countries with more welcoming policies experience sharp financial benefits that could have been utilized to further the pursuits of Singapore.