Singapore Banks Close Cryptocurrency Firms’ Accounts
Several banks in Singapore have closed the accounts of an estimated 10 firms specializing in cryptocurrency and payments services.
Anson Zeall, chairman of Access, Singapore’s Cryptocurrency and Blockchain Industry Association, said yesterday in an interview with Bloomberg that this is a problem “common among leading FinTech hubs” in many countries and urged Singapore’s government to “take a leadership role and demonstrate how to come to an effective resolution among all parties.”
Chia Hock Lai, president of the Singapore Fintech Association, also reported that some of the organization’s members have experienced trouble with banks in this regard.
The Monetary Authority of Singapore (MAS) was quick to clarify that it does not interfere with the decisions made by commercial banks within its borders, adding that “regulations and the exact role of the blockchain in society continues to present as a gray area for everyone.”
This statement at first seems to signal a slight disconnect between the Singaporean government and the country’s business community, which is increasingly turning to blockchain technology to solve problems.
However, the MAS has also expended great effort into creating a central bank digital currency, as well as into a digital ledger project.
It has also clarified that it does consider some tokens to be functional securities.
This is supposedly in response to a growing market demand for cheaper and more transparent business operations and confirms Singapore’s commitment to becoming a global hub for blockchain development.
Currently, technology and financial firms doing business in Singapore are looking to employ the use of blockchain-based “smart contracts” in lieu of traditional paperwork to cement business dealings.
The Asian Development Bank reports that this rising interest in blockchain technology is due to last year’s introduction of stricter regulatory requirements that prompted many banks to “pull back from the capital-intensive sector.”
Specifically, some firms hope to use smart contracts, enabled by blockchain technology, to reduce the expenses associated with more traditional avenues of doing business. They also hope that it could lead to greater supply-chain transparency, thereby reducing the risk of fraud.
They see blockchain as a solution to the problem of having to pay higher costs in order to maintain compliance.
It appears that the Singaporean government and the business community that thrives within its borders understand that the development of blockchain technology can potentially be a solution to several operational and financial problems the financial and technical sectors face.
However, it also appears that the former is exercising a certain level of caution with regards to its implementation.
