The Monetary Authority of Singapore’s (MAS) managing director, Ravi Menon, stated that cryptocurrency does not “pose [risks] that [warrant] regulation,” in an October 24 interview. He said that while anti-money laundering (AML) laws apply to “activity around cryptocurrency,” “very few jurisdictions regulate” the digital assets themselves. “Because it is a known fact that cryptocurrencies are quite often abused for illicit financing purposes,” he explained, his organization would expect an intermediary dealing in these assets to “have in place anti-money laundering controls.” In other words, while MAS wants to prevent the funding of terrorist groups, it would rather impede people’s ability to use cryptocurrency toward that end rather than targeting the tokens directly.
He also noted what he calls “excessive hype” in the blockchain space around cryptocurrency’s application as an “investment vehicle.” Instead of understanding the technology’s primary function as a financial instrument “that’s going to rise in value,” he advocates for an approach that explores the possible benefits offered by other use cases. He provided the example of a platform that would “make cross-border inter-bank payments … cheaper, faster, [and] more efficient” as a means “for migrant workers to send money back to their villages.”
MAS, which functions both as the country’s central bank and its financial regulating body, has conducted its own foray into the blockchain space with Project Ubin, which recently began its second phase. The enterprise has involved the testing of inter-bank transfers using a private Ethereum network, among other trials.
Menon’s comments echo, at times in an almost word-for-word manner, an October 3 letter on the same topic by Deputy Prime Minister Tharman Shanmugaratnam, who also serves as the minister in charge of MAS. However, he did not provide any updates regarding Shanmugaratnam’s claim that “MAS is working on a new payment services regulatory framework that will address [AML/ terrorist financing] risks.”