Dec 6, 2023

The Monetary Authority of Singapore (MAS) recently released the second and final tranche of responses as feedback on a consultation paper of proposed regulations for crypto service providers.

Video transcript

Joining us now is TRM lab, senior policy advisor and former Deputy director in charge of licensing for payment service providers at the Monetary Monetary Authority of Singapore. Angela. Welcome Angela. Hi Jen. Hi, Lawrence. Um, very good to be here with you today and I did hear something about Lawrence celebrating her birthday. Oh, that was yesterday. Today is just a regular happy birthday. Thank you. I think it's now two days. You're in Singapore. So you're not two days away from my birthday since. But it's all right, you guys are in the future. Lawrence is getting all the birth they love even from the future. All right. Yeah, Angela, moving away from Lawrence's birthday now, we've been celebrating it. I want to say for three days on the show, we had a pre birthday celebration, a birthday celebration and that was the post birthday celebration. Uh Let's talk it several days of birthday. Hey, you can never have enough. Never have enough. It's true. All right, let's talk about regulation in Singapore, uh Angela and just give us a quick overview of what's going on there. What is the Monetary Authority of Singapore focusing on and what are they kind of leading to the side right now? Yeah. So I think November has been a very eventful month for crypto policy in Singapore. Um Singapore has recently finalized a slew of crypto consumer protection measures for retail customers that it had consulted on last October. It's, it's fairly extensive including things like no incentives for sign ups raffles or trading, no offering of any lines of credit, no local credit card payments and no lending and staking services for retail consumers. So um I think this is just generally reflective of MA Ss kind of long held stance against speculative retail trading. Um But the other kind of interesting thing that has happened in November was around the Singapore Fintech Festival where me kind of rolled out a slew of new initiatives also around digital money. Um and they talked about, for example, the approach to digital money and projects that they are undertaking, taking to kind of explore in these three areas, tokenized bank liabilities, regulated stablecoins, wholesale, CBD C. So very interesting, very interoperability focus. I think there's a balance um in terms of, you know, the kind of dialogue that's going on in Singapore right now. So ho how does that compare, let's say to the United States? I mean, you, you said that they, they, they have an approach to digital assets. What is that approach exactly? What, what's the, what's the official doc or what's the doctrine that's being delivered to the markets. Then. It's interesting, Lawrence that you use the word official doctrine. And I think that would actually be summed up in MS managing director, Ravi Menon's last speech, last year's speech at the Singapore Fintech Festival where he said yes to digital asset innovation and no to Cryptocurrency speculation. So that is the official kind of position um in Singapore. And I think um it's, it's quite reflective really of what we are also seeing in the rest of the region. Um It's a focus on regulatory clarity, it's a focus of course on consumer protection um as we are seeing globally, but also, you know, having this dialogue and trying to kind of thread the needle between having robust oversight as well as you know, allowing room for innovation. Now, speaking of that innovation, ma s recently said that they're going to be promoting wholesale CBD CS, tokenized bank liabilities and regulated stable coins. Uh Talk to us about what this says about their approach to digital assets given that the retail rules sound pretty stringent. Yeah, I I think it's um the approach to digital money, I think is a very interesting one. I think um kind of when you look at the fact that they're promoting really three types of digital money, it is obvious that is centered on the theme of interoperability where you know, it is not about one or the other type of digital money, but you know, public digital money, private, digital money, it can coexist together in an ecosystem. So I think that's very much the theme um of interoperability, of collaboration and of kind of multiple solutions. Now, Lawrence asked you to compare what's happening in Singapore with the US. But let's compare now with some other Asian jurisdictions. How does Singapore's uh framework here compare with what's going on in say Hong Kong or Korea? Yeah, thanks Jennifer. I think, you know, generally that's kind of like a similar theme. I would say that, you know, globally and, and definitely in Asia Pacific, um regulatory clarity is the theme and kind of centered around consumer protection. So, so we've kind of seen that in Hong Kong as well, right, where they've just rolled out their regulatory regime for virtual asset trading platform. Um and it is, and it is actually setting about very, very high. Um In fact, I think one of the top executives said that if you want to, you know, operate a non compliant or loosely regulated uh virtual asset business, then this is not the place um that is not the kind of crypto hub that they're trying to create. Um so, but at the same time, you know, just like Singapore, they are like initiatives experimenting in tokenization, um CBD CS and E Hong Kong dollar in collaboration with the industry, Hong Kong also issued its first tokenized green Bond. So I think, you know, in terms of the approach, it is it is very, very similar. And if I may kind of, you know, draw paint a theme, I think what I like when I look across the region um in terms of the theme of how regulators are engaging with the crypto sector, I see kind of three CS um one of them is not crypto. So it's about clarity where they are trying to provide regulatory clarity in terms of articulating a specific regulatory framework for crypto. Um But, but you know, it's not a one sided conversation, there's also a huge element of collaboration in achieving that clarity. There is a consultative back loop. Um And, and this kind of feeds into my third, which is calibration where the regulators are kind of listening to what the industry has to, has to say and they're using that to calibrate their own requirements. I mean, they may not always agree, but I think it is very well known to everyone in the ecosystem that there is kind of these feedback loops in the various Asia Pacific jurisdictions. We had uh our, our previous guest discussed uh the idea that uh finances uh change if you will and CZ going to the United States and, and, and pleading guilty and uh the fines that finance will have to pay is a, is a significant change in the way crypto companies are approaching regulation. Is that true as well in Asia? In places like Singapore where to begin with? There is a, there's sort of this dichotomy if you will, we have a very, uh somewhat stringent uh um regulation on crypto while, while trying to foster the industry. But at the same time, you did have some of the Wilder players, uh, tended to come from Asia. Uh, it has there been a change in the approach of not the regulators but the companies themselves over the past year or so since the collapse of us t, since the collapse of FTX. Yeah, Lawrence, I think that, you know, it's actually been a whole season of change and I would say it began even before um FTX, but FTX and all these definitely accelerated that because the pace of regulation um got a lot faster post FTX. And I think um what right now, what is happening is that the crypto industry as a whole is kind of navigating this season of change um and adolescence as you will um of, you know, moving from AAA state of, you know, relatively light or no regulation um to, you know, having all these regulatory frameworks fall in place. And honestly, the same can be said for regulators as well. I think it is a process of understanding this new sector, the underlying Blockchain technology and developing a regulatory framework that is proportionate for that. Um I think it's just like a whole part, a whole process of maturing for the industry. Um and, and I think kind of developing that mutual understanding and here, I think in Asia, we've found that having this feedback loop between the regulator and the private sector has been very, very helpful in accelerating that understanding. In fact, one of the regulators that I talked to recently said that she finds this process of industry engagement very, very helpful because, you know, it's a space where it's so fast moving and you really, you don't know what you don't know. And so it is important to kind of talk with the people who are at the forefront of creating this innovation.

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