Singapore’s crypto classification offers model for region
Singapore divides crypto tokens either as utilities, payments and securities and says no token so far has had to be regulated under securities law
As US regulators pile more pressure on the crypto sector, Singapore has taken a more positive approach. The island-city state’s de-facto central bank, the Monetary Authority of Singapore (MAS), has clarified a report it released last year as a guide for crypto businesses and organizations operating on the island state to make clear that no tokens the MAS has seen need to be regulated under securities law.
The head of the MAS technology infrastructure office for fintech and innovation, Damien Pang, addressed an audience at the CoinDesk Consensus Singapore 2018 conference on Wednesday.
He referenced the November 2017 publication, called “A Guide to Digital Token Offerings,” to state that every international regulatory body and jurisdiction has their own set of criteria for judging what is or is not considered as a security.
Pang, who mentioned the path taken by US Securities and Exchange Commission – that to date has been highly vocal about crypto-currencies but ambiguously has yet to develop an official framework for the industry – and pointed out that the Singapore publication has divided crypto tokens into three separate categories; utilities, payments and securities.
“The MAS takes a close look at the characteristics of the tokens, in the past, at the present and in the future, instead of just the technology built on,” added Peng.
Singapore will regulate assets that cross any of these three classifications or if characteristics of utility or payments tokens become aligned with those of securities. A payments service bill is expected to be enacted by the end of the year to handle any types of tokens which have storage value. Utility tokens will not be regulated, according to Pang.
During the conference Pang was asked why the regulator did not specify which crypto-currencies would fall outside of regulations. “The moment you start naming names, people take it very literally – these are and those are not. But in fact, there are more than 1,000 tokens. Bear in mind, we provide clear guidelines to categorize them,” he responded.
A clear framework of token classification such as Singapore’s could provide a basis for regulatory processes in other crypto friendly nations in the region such as South Korea, Thailand and the Philippines.
Japan and Thailand are also in the process of approving exchanges and crypto companies that have applied for official licenses and South Korea’s Financial Supervisory Service has proposed greater international cooperation between regulators for crypto and initial coin offering (ICO) regulation.
While US regulators stumble and create more market uncertainty, those in Asia are getting their shops in order to embrace this nascent industry.