The chief FinTech officer at the Monetary Authority of Singapore (MAS) is questioning the value of private cryptocurrencies as regulators step up the development of a central bank digital currency (CBDC).
Sopnendu Mohanty, MAS FinTech head since 2015, told Financial Times (FT) that he expects there will be a state-backed alternative to cryptocurrency within three years.
Singapore is considered not friendly when it comes to cryptocurrency, he told FT, but he always asks people “… friendly for what? Friendly for a real economy or friendly for some unreal economy?”
While Singapore attracted many crypto businesses due to low taxes and a perceived welcoming regulatory climate, the market collapse has made officials take a harder stance, FT reported.
Singapore-based Terraform Labs was the company behind the $40 billion collapse of stablecoin Terra and token luna. Soon after, Singapore-based crypto hedge fund Three Arrows Capital failed to meet margin calls.
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Binance closed its cryptocurrency trading platform in Singapore earlier this year and dropped plans for a license in the city-state following the institution of stricter rules by MAS. Its CEO Changpeng Zhao had been based in Singapore, according to media reports.
Crypto exchange Bybit said in April that it would leave its Singapore headquarters for Dubai instead, according to media reports.
Mohanty told FT that Singapore is “brutal and unrelentingly hard” when it comes to rule violations by companies in the market.
He said that the city-state takes the licensing of crypto businesses seriously and it’s a slow process with extreme due diligence and very few have been granted.
The crypto trading platform Crypto.com received an in-principal approval to operate in Singapore, FT reported. The company has a license in Dubai and is planning a cryptocurrency exchange service there.