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As the Asian city-state increases its challenge to Hong Kong’s status as a digital financial center, Singapore will grant formal regulatory approval to a cryptocurrency exchange for the first time.
The Australian Exchange Independent Reserve has received “in principle” approval from the Monetary Authority of Singapore, allowing it to operate as a regulated digital payment token service provider after applying for a license in April last year.
The company is the first such supplier to be approved by the Singapore regulatory agency, with approximately 170 applicants, including global exchanges Binance And Gemini. Some groups, including Binance, have been granted exemptions to provide services to retail and institutional investors in the city while they are waiting for formal permits.
“For this day, we have been waiting for more than a year,” said a foreign cryptocurrency exchange operating in the city. “Now everyone wants to know who will be approved next.”
Due to the development of the city, global cryptocurrency groups are rapidly expanding in Singapore Friendly regulatory environment, Which is in sharp contrast with other markets that have taken a tougher approach to the industry.
Regulations vary widely between jurisdictions, which means that with the start of regulatory agencies, several large global exchanges are seeking licenses in various countries Scrutinize more closely Their operations.
Singapore’s resource-poor economy relies heavily on financial services. As Hong Kong’s competition as an Asian financial center is seen as Unattractive According to the National Security Law.
The digital asset industry has become another front line of competition among rival cities.
Like mainland China, Hong Kong has adopted Stricter stance About the arbitrary cryptocurrency industry. Under the new law, the city will restrict cryptocurrency trading to authorized or institutional investors.
At the same time, Singapore has made it easier for foreign crypto groups to set up offices and provide services to residents and businesses, despite restrictions on transaction volume. It introduced a payment law in January 2020, under which companies can apply for licenses. Approximately 90 digital asset companies have applied for and operated under the exemption.
On Monday night, the Independent Reserve, which was established in 2013, was approved to operate, causing a wave of excitement across the industry and looking forward to more progress. The company has 200,000 customers in Singapore, Australia and New Zealand.
“All eyes are on Singapore and its regulatory system,” said Raks Sondhi, managing director of the Independent Reserve Bank in Singapore.
He added that MAS hopes to establish this city-state as a global hub for the blockchain ecosystem, and the “long process” of obtaining a license is due to regulators focusing on ensuring consumer protection and anti-money laundering measures.
These include the implementation of “travel rules,” which require crypto companies to share personally identifiable information for transactions that exceed a certain value. According to the MAS guidelines, all successful applicants in Singapore need to implement this rule.
Eric Anziani, chief operating officer of cryptocurrency trading platform Crypto.com, said that Hong Kong’s geopolitical risks have escalated. “Singapore is also more beneficial to retail investors,” he said. “I think there are more opportunities in terms of talent now.”
The head of another global exchange in the city-state stated that “China is pending” makes Hong Kong less attractive as a cryptocurrency destination, especially for custodial services. “Many of our customers are worried that Chinese officials may encounter and place their assets in offline vaults.”
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