Despite a fall in crypto prices, the creation of digital assets is still high, the bank’s analysts said.
The central banker compared crypto market dynamics to the 2008 financial crisis and called for additional regulation and taxes.
If the license application is accepted, the bank would be authorized to offer exchange and crypto-asset services.
The exchange was valued at $14 billion in a funding round closed last week.
Among the initial steps will be legislation to recognize stablecoins as legitimate vehicles for payments.
The government is set to reveal its regulatory package for crypto in the coming weeks.
Many high-level executives of traditional technology firms have left their jobs to dive into the metaverse, with Grab’s head of technology, Wui Ngiap Foo, being the latest.
Inflows into digital-asset funds last week were 4.5 times what they were the week before.
The Fed might not act as decisively in tightening monetary policy if financial stability concerns start to outweigh the risk of fast inflation.