Bank of Singapore’s Chief Economist Says Cryptocurrencies Could Edge Out Gold

Bank of Singapore’s Chief Economist Says Cryptocurrencies Could Edge Out Gold

But certain risks, such as trust, volatility, and regulatory clarity, need to be addressed first.

The Bank of Singapore is the latest institution to favor cryptocurrencies in its push to usurp gold. Optimism over the asset class is high, with the industry showing signs of more growth.

While Bitcoin and several other large-cap cryptos appear to be on the upsurge again, sentiment about the crypto market is gaining momentum.

However, many are still hung up on the leading cryptocurrency’s recent performance, and talks of the asset usurping gold as the global reserve currency have continued.

No Way Over Fiat, but Time’s Up for Gold

The latest body to weigh in on the prospect of Bitcoin overtaking gold is the Bank of Singapore. According to a report from The National news, the bank recently published a research note where it touted cryptocurrencies as a possible replacement for gold down the line.

In the report, the Bank of Singapore argues that cryptocurrencies are unlikely to replace fiat currencies – practically pouring cold water on the hopes of those who are touting the digital yuan and other Central Bank Digital Currencies (CBDCs).

Mansoor Mohi-uddin, the bank’s chief economist, explained that cryptocurrencies are an inefficient unit of exchange, and central banks won’t be able to print them at will in times of crisis. However, he also explained that digital assets are more likely to become the major safe-haven asset. With the market showing significant potential over the past few years, there is every reason to believe that cryptocurrencies could easily overtake gold.

To do this, the bank believes that cryptocurrencies will need to overcome some hurdles. For one, it pointed out the need for trusted institutions that will provide custody for investors. Many cryptocurrencies would also need to be more liquid, allowing high levels of trading and other activities to take place. Improved liquidity will also reduce volatility, a problem that the crypto industry has had for years.

Everyone Loves Crypto

The Bank of Singapore isn’t the only institution pumping Bitcoin to overtake gold eventually. In a recent opinion piece, Anthony Scaramucci and Brett Messing, two executives at New York-based hedge fund SkyBridge Capital, explained that Bitcoin is ripe for investment as its ownership is now as safe as gold and government bonds.

SkyBridge Capital filed with the Securities and Exchange Commission to launch its Bitcoin fund last December. When the fund launched fully earlier this month, the New York firm claimed that it had as much as $310 million in exposure to the leading cryptocurrency.

Investment banking giant JP Morgan has also touted Bitcoin’s chances of taking up more of gold’s market share. In an investment note, the company’s strategists said:

“The adoption of bitcoin by institutional investors has only begun, while for gold, its adoption by institutional investors is very advanced. If this medium to longer-term thesis proves right, the price of gold would suffer from a structural headwind over the coming years.”

Institutional investment is sure to push Bitcoin and the entire crypto market even higher. With government regulation expected soon, the future definitely looks bright for this fledgling market.

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Author: Jimmy Aki

Singapore’s Financial Regulator, MAS, Wants More Power to Push Stringent Rules For Crypto

Singapore’s financial regulator, which also serves as the country’s central bank, The Monetary Authority of Singapore (MAS), is seeking to introduce stricter rules for the crypto industry to adhere to the new Financial Action Task Force (FATF) standards.

The financial watchdog is seeking to have more powers that will help in prohibiting any unsuitable enterprise from doing any business within the country. The financial overseer is also seeking powers to oversee, license, and regulate all crypto businesses which offer services in other countries but are based in Singapore.

As per the proposal, the country’s financial authority is seeking to expand the provisions of the Payment Services Act (PSA), which came into effect in January this year. If the proposal is adopted, Virtual Asset Service Providers (VASPs) will be required to conduct their operations in other countries using the same standards and regulations in their country of origin, Singapore. Although the MAS, back in March, already exempted a few of the top crypto companies: Binance, Coinbase, Gemini, and Ripple.

The regulator has already published a consultation paper seeking public input and feedback in regards to the expanded powers of the Monetary Authority of Singapore.

The regulator argues that the new proposal will put a halt to regulatory arbitrage where multinational VASPs choose the regulations to adhere to if they suit their mode of business.

The VASPs that will be significantly affected by these proposals are the ones that work abroad but maintain a “meaningful presence” in the city-state; that is, their directors and offices are located within Singapore. Corporations registered in Singapore, partnerships, as well as limited liability partnerships created in the country, will also be affected by the new legislation.

The financial regulator also explains that the regulations will help Singapore to adhere to the set anti-money laundering (AML) standards that were set late last year by the global financial watchdog FATF.

The public has until August 20 to send their views and opinions.

Asia’s most preferred countries, is Singapore, for the crypto industry, because of its friendly crypto environment. There are more than 150 crypto and blockchain-based firms headquartered in the city-state.

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Author: Joseph Kibe

Binance Applies for Singapore Crypto License Under The New Payment Services Act

Binance crypto exchange through its parent company has applied for Singapore’s new operating license. This follows an upgrade of laws governing crypto in the FinTech friendly jurisdiction. Singapore sought to advance its payments’ ecosystem legalities as more firms’ leveraging blockchain tech and tokenization set up in the country.

Changpeng Zhao (CZ), has since cleared the air for Binance Holdings noting that its local entity was among the first stakeholders to apply for this new license. According to Mr. Zhao, Binance Singapore is quite open-minded and has been working closely with local authorities since its launch.

Singapore’s Payment Services Act

The payment services act came into being at the beginning of 2020 and is meant to harmonize digital payment operations. This act now regulates crypto market players whose business involves tokens like Ether or clearing and settlements networks that facilitate digital currency transactions.

One of the major reasons for advancing crypto regulation in Singapore was risk minimization. The new payments’ laws are set to empower the country’s Monetary Authority in issues money laundering, terror financing and cybersecurity exposures. Furthermore, it will be much easier to regulate all crypto-oriented firms in Singapore going forward under the same law.

Other firms that have signaled an intention to acquire the new license include Luno and Liquid Group Inc. The two are headquartered in London and Tokyo respectively but have a significant part of their operations in Singapore.

Binance’s swift move in compliance shows that the company’s market prospects in Singapore are promising. The exchange’s operation within this jurisdiction are run under Temasek Holdings’ VC wing, Vertex Venture. Since its inception, Binance has been on an upward growth trajectory despite regulatory uncertainties in booming markets like the U.S. This firm’s journey began with a crypto-to-crypto exchange mindset but is now making game-changing moves in both product innovation and compliance in new territories like Singapore.

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Author: James W