The country’s central bank recently said in its statement that Blockchain is fundamental for transforming Singapore’s financial services. The Monetary Authority of Singapore (MAS) is actively engaging in the adoption of technologies containing blockchain and artificial intelligence (AI) to consolidate the country’s digital transformation efforts.
The South-East Asian country and global financial center, Singapore has been operating an environment that enables blockchain development. On the contrary, China’s recent approach where it recently restricted certain digital currency trading and initial coin offering (ICO) based fundraising.
As per the valid report published by South China Morning Post, Damien Pang, head of technology infrastructure office at the MAS said in his statement that “the organization aims to regulate the use of blockchain rather than the technology platform itself.”
Further speaking to the subject matter, he said, “We aim not to directly regulate a specific technology itself because technologies are always getting better.”
With the blockchain friendly environment in place, Singapore has drawn dramatically where numerous foreign startups to set up offices on the island state. The list also includes Chinese startups have recently faced certain pressure from Beijing like bitcoin mining collective Bitmain, Ethereum crypto wallet token and crypto exchange Huobi Group.
Though recent crackdowns in China, the government is actively focusing to utilize blockchain application for a variety of users such as cybersecurity and records management. Amid this, the country fears that retail investors actively involved with ICO schemes and crypto exchanges can lead to financial instability.
Further speaking to the subject matter amid crackdowns, China has seen almost more than six times the companies got them registered with the buzzword ‘Blockchain’ in their names in the first half of 2018 alone as compared to all in last year. This transforms almost 4,000 renowned ‘Blockchain’ companies that are in existence as per the recent estimates by the SCMP.
Needless to say that the Blockchain Technology was designed to provide transparency to a larger extent for all those users on the network. Let us not forget that the nature of blockchain allows anyone to share, execute and store records of transactions securely and more efficiently. Having said that anyone on the network can perform an audit function that prevails transaction history at any point in time.
There were almost 57 blockchain projects in Singapore that raised US$574.8 million in total through ICOs in Q2 this year according to ICO Rating. On the contrary, Hong Kong recorded US$47.6 million in investments into 14 projects within the same period alone.
Amid this, Singapore has MAS bifurcates digital assets into three groups namely, payment tokens (for making payments), utility tokens (for users to access a company’s product or services), and securities (tokens traded for investment).
The regulator in Singapore is currently not considering to regulate utility tokens. However, it is exploring to craft certain laws for a payment service tokens by the end of this year. However, till date, the central bank has not come through any securities tokens as reported by Pang.
Besides this, the MAS is also actively taking steps in pushing the use of blockchain in the financial industry beyond regulations. Because the MAS knows the tremendous benefits that the blockchain has in offer.
Additionally, it has created a partnership with 11 financial institutions that also included the Singaporean stock exchange and five more technology partners for Project Ubin which is an initiative to explore the numerous use of blockchain for clearing, executing and settlement of payments and securities.