Regulatory changes will affect the cryptocurrency and blockchain ecosystems in the future. The Monetary Authority of Singapore is looking to make some changes. A consultation paper has been presented to make the exchange ecosystem more competitive. This is positive news for the cryptocurrency ecosystem as a whole.
Improving The Position of Singapore
When Singapore introduced its blockchain-related exchange regulation, an important first step was taken. The introduction of one set of rules for every company allows the industry to boom in the country. However, there are still a fair few improvements to be made in this regard. These existing rules are somewhat harsh when dealing with smaller players.
As such, the Monetary Authority of Singapore wants to shake things up. Their new consultation paper discusses a three-tiered system of regulation. Different market operators pose different risks and have different requirements to adhere to. Making this regulatory ecosystem more competitive and attractive will bring more companies to Singapore. The MAS explains its decision as follows:
“MAS has observed the emergence of new business models in trading platforms, including trading facilities that make use of blockchain technology, or platforms that allow peer-to-peer trading without the involvement of intermediaries. As the current RMO regime has been in place since 2002, it is timely to review the regulatory framework for market operators to ensure that it continues to meet the demands of the changing landscape.”
Improving the Cryptocurrency Exchange Ecosystem
Under the current rules, there are two categories. On the one hand, there are the approved exchanges. Additionally, there are recognized market operators. With the new tiers, smaller market operators will have an easier time setting up their business in the country.
More specifically, tier 3 exchanges will have reduced capital requirements. Additionally, they will have far less red tape to deal with, which can only be considered to be a good thing. These tier three operators can also engage overseas regulated clearing houses to expand their operations. These changes have yet to be approved by the government prior to becoming law, though.
Any market operator growing in size will need to deal with the next tier of regulatory measures. It is an interesting structure which will allow for more competition. Singapore is taking interesting steps in this regard. Other Asian countries such as China and India aren’t as forward-thinking when it comes to cryptocurrency and exchanges. As such, the region may attract more companies in the near future.
Image from Shutterstock