Singapore stands apart from its neighbors in how it treats cryptocurrency companies. The city-state has avoided the heavy regulations that both Japan and Hong Kong have imposed. Jarrod Luo runs Tembu
Singapore stands apart from its neighbors in how it treats cryptocurrency companies. The city-state has avoided the heavy regulations that both Japan and Hong Kong have imposed.
Jarrod Luo runs Tembusu Systems, a blockchain startup, as chief operating officer. He told Deal Street Asia that Tokyo and Hong Kong had each responded to crises with strict rules. Japan moved harshly after the Mt. Gox collapse damaged confidence in bitcoin, while Hong Kong clamped down on MyCoin after the scheme defrauded investors. Singapore took a different path.
"Singapore has not seen similar levels of regulatory interference into the industry and currently maintains the best prospects amongst the three," Luo said.
David Moskowitz operates Coin Republic, a bitcoin brokerage and trading firm based in Singapore. In April, Moskowitz described the regional landscape. "Hong Kong as a financial hub has established itself but is always under the shadow of China," he said. "Japan also has the potential to be a hub however, their government tends to be very slow to react and so far has made many poor statements in regard to Bitcoin."
Singapore's advantage came from its government's hands-off stance. "The Singapore government has taken a laissez faire approach to digital currencies and tends to be extremely practical regarding regulations in the area," Moskowitz continued.
The city-state did set out a regulatory framework. In March 2014, Singapore's Monetary Authority announced it would regulate digital currency intermediaries to guard against money laundering and terrorist financing. But the MAS stopped short of treating bitcoin and other digital currencies as securities or legal tender. That meant companies did not need to comply with Singapore's Securities and Futures Act or Financial Advisers Act.
Antony Lewis directs itBit Bitcoin Exchange. He attributed Singapore's rise as a digital currency hub to a mix of factors. "Regulatory clarity has propelled Singapore to the forefront of the digital currency industry and has helped the local startup scene to flourish," Lewis said.
The regulatory environment attracted infrastructure. Startupbootcamp Fintech, a fintech accelerator, set up operations in Singapore. DBS Bank, MasterCard, Route 66 Ventures, SBT Venture Capital, Infocomm Investments and the Monetary Authority of Singapore backed the program.
Luo looked ahead. "Fintech is such a widely required and integral industry, basically forming the interface between the economy and the movements of value within currencies, commodities and everything that involves value," he said. "It is an integral part of human economic condition, so if we're going to see a big boost in intellectual and financial interest, the prospects look interesting, if not rosy."
