Singapore recently passed legislation that requires crypto firms located in the country to seek a special license to serve overseas consumers. As a result, other jurisdictions, such as Dubai, have become more attractive. Before this legislation, Singapore was considered a crypto haven.
The Financial Services and Markets Bill (FSM) mandates that Singapore-based crypto firms obtain a specific license. The reason for this required license is to do business with companies located outside of Singapore. On the contrary, though, this might result in Singapore not being a crypto haven anymore.
According to a report on Business Insider India, the bill will significantly impact crypto companies. It will mainly affect companies from India that have relocated to Singapore to avoid regulatory issues back home.
In addition, Singapore’s latest verdict may serve as a precedent for other countries hoping to benefit from international trade. As a result, Singapore appears to be moving away from being a favorable location for crypto platforms in general. MAS has been given new powers to supervise cryptocurrency businesses that only serve foreign markets from their Singapore headquarters.
The New Bill
The board member of the MAS, Alan Tan, expressed his opinion regarding the new bill. He said that Singapore companies who offer services related to virtual assets like Bitcoin outside Singapore may represent harm. Tan noted that the goal of the FSM Bill is to reduce these risks by regulating these players and requiring them to meet AML/CFT standards.
MAS acknowledges that some of the technological use cases for cryptocurrencies are cutting-edge and enticing. However, it still does not believe that crypto is a secure investment for the average retail investor.
On the other hand, the assistant managing director of MAS, Loo Siew Yee, added some points regarding blockchain and crypto. As blockchain technology and unique use cases for crypto tokens continue to be developed, MAS enthusiastically supports these efforts.
Nonetheless, it is important to keep in mind that trading cryptocurrencies can be quite dangerous. Thus, they don’t recommend this to the general public. The risks of trading in DPTs are so substantial. Therefore, neither should DPT service providers try to make the process appear less risky than it actually is. This is what Yee noted in order to reason the decision about the bill.
The Lack of MAS’s Support For Crypto Investment
The MAS’s attitude toward cryptocurrency investment is unpleasant. For the average retail investor, entry to crypto is getting difficult as more countries follow this path.
As the MAS describes the risks, it is true that there are extremely risky investments. However, many investors would rather take the risk of investing in crypto’s more trustworthy chances, such as the DeFi sector, than keep their money in the bank. Since other alternatives like Dubai are more welcoming to small investors and the blockchain and cryptocurrency industry, it is hopeful that they will continue to grow and thrive.