Singapore’s approach is to be part of the crypto journey

Article was first published here in The Financial Times

Singapore’s cryptocurrencies approach shouldn’t be seen as controversial (“Singapore faces fight for Asia crypto crown”, Report, October 1).

Recent regulatory clampdowns may have raised questions about Singapore’s open approach to crypto businesses, but the regulators here have got it right. Whether or not the region’s “big bet” pays off, banning cryptocurrency trading makes no sense.

The industry remains a “wild west” because there is no consistency on standards to make it stable and secure for investors. Trading, in particular, remains fractured and illiquid, which contributes to the wild price swings.

If it’s a matter of taking a balanced approach, the only way you can be sure you are getting it wrong is by banning them entirely. Financial authorities, such as those in China, have been all too quick to ban elements of crypto, which only puts investors at greater risk of fraud, such as initial coin offering scams. People will continue to use cryptocurrencies so this will only push activity underground or elsewhere. Just look at the number of start-ups and talent piling into the sector. The way we see it in Singapore, it is much better to find out how to solve these problems and benefit from being part of the crypto journey.

Done correctly, regulation can be very productive and foster crypto development in a healthy way by working with the industry to improve standards and prevent illicit activity. Plenty of businesses out there want to help create that framework. It’s about time the US and other leading markets caught up and took steps to establish
collective frameworks so investors can operate safely and business can thrive.

Increasingly, for Singapore, the financial competition in the region is a game of fintech innovation, so I don’t see how we could exclude cryptocurrencies. Our approach to crypto regulation has created an environment that fosters innovation while setting up frameworks for security and stability.

Now that Singapore’s crypto start-ups are gaining momentum, its mainstream financial institutions are learning about the technology and global blockchain businesses are setting up in the region.

Don Guo
Chief Executive, Broctagon Fintech Group, Singapore