Singapore promises ‘brutal and unrelentingly hard’ action on dodgy crypto players

June 27, 2022 TH Author

In the same week that it welcomed the launch of a local center of excellence focused on crypto-inspired central bank digital currencies, Singapore’s Monetary Authority (MAS) has warned crypto cowboys they face a rough ride in the island nation.

The center of excellence (COE) was established by the Mojaloop Foundation – an open source effort to create payment platforms to make digital financial services accessible to those access to banks. The COE aims to “accelerate financial inclusion in emerging markets” through hackathons, workshops and pilot projects while examining expanded CBDCs payment capabilities.”

Singapore’s sovereign wealth fund has invested in Mojaloop, and MAS chief fintech officer Sopnendu Mohanty serves as a board advisor and the authority provides representatives to the Foundation’s working group, alongside folks from the Bill & Melinda Gates Foundation, Google, and more.

Mohanty hailed the COE and Foundation as “a step forward into the future of financial services” and said he looked forward to MAS supporting the COE’s efforts to “foster greater international collaboration in enabling more seamless cross-border transactions.”

But the FinTech boss also outlined a less enthusiastic stance on more freewheeling use of digital currencies.

“We have no tolerance for any market bad behavior. If somebody has done a bad thing, we are brutal and unrelentingly hard,” Mohanty told The Financial Times.

“We have been called out by many cryptocurrencies for not being friendly, My response has been: friendly for what? Friendly for a real economy or friendly for some unreal economy?” Mohanty doubled down.

The officer also predicted Singapore will offer a state-backed alternative within three years, as he blamed private cryptocurrency for causing market turmoil – like the $40 billion Luna not-so-stablecoin crash.

Mohanty stated that efforts like Mojaloop are more to Singapore’s liking and opined that digital currency will eventually be integrated into the platform and made available to central banks beyond Singapore.

MAS itself has also warned against the alterna-cash in the past. In January, it discouraged its trading and took action to limit promoting digital payment tokens in certain public areas.

Mohanty isn’t the first high ranking Singapore public servant to rail against crypto. In late May, deputy prime minister Heng Swee Keat told conference attendees retail investors should not buy cryptocurrency, although last week he also declared “the potential for FinTech remains tremendous.”

Singapore’s digital curiosity can be seen in its CBDC tested interoperability tests for cross-border payments with Australia, Malaysia and South Africa – an effort Heng said “validated various design approaches through prototyping” and its resulting recommendations would “support the G20 roadmap for enhancing cross-border payments.” ®