The director of Singapore-based Bitcoin brokerage Coin Republic says that city-state should approach the regulation of bitcoin and digital currencies with a “light touch”, according to ZDNet.
In the eyes of David Moskowitz, government-imposed regulation alone won’t put a stop to illicit use of digital currency. The idea instead is to allow the technology behind these rapidly-growing crypto-currencies to curb potential crimes like terror financing and money laundering.
The Monetary Authority of Singapore (MAS) has said they’re soon planning to release legislation that will require digital currency exchanges, brokerages, and other intermediaries to gather the identities of customers, with an additional requirement to report suspicious financial activity to appropriate authorities.
Moskowitz expects regulations to be out soon, but before they do, he at least hopes they’ll be taking community feedback into consideration.
“Based on MAS’ previous statement, I think the legislation will be similar to those related to the remittance and currency exchange business, which isn’t conducive for Coin Republic, specifically,” he said.
“These regulations would raise the cost of running the company and I may have to rethink the business, maybe considering moving the business to another country.”
Coin Republic is also the operator of a bitcoin ATM in the city, which has installed biometric features to collect user identities, but they’re currently disabled to improve user experience at this time.
Depending on rules set forth by the MAS in the months upcoming, those features may need to be activated.
But he’s hoping it doesn’t come to that.
“I don’t have any issue with light touch regulation like [KYC/AML] policies, which are reasonable for anything above a certain transaction value such as $5,000 or $10,000,” he says.
Anything beyond that could very well just be a nuisance.
“So the technology can handle a lot of the concerns, and I think it is more effective than regulations which are always gonna be a step behind any technology,” he noted.
The reality is that as digital currency becomes increasingly popular, authorities will look for ways to regulate it. Unfortunately, these regulations have the possibility of causing headaches for all parties involved.
Here in the United States, the State of New York is currently considering regulation of digital currency. The New York State Department of Financial Services recently held hearings with panelists representing the digital currency industry and government institutions in attempts to get feedback.
Certainly, it will be interesting to see where the MAS takes this. One thing’s for sure, though. Moskowitz isn’t the only one looking for a “light touch” on digital currency regulation.