When it comes to crypto regulation and adoption, several countries can make a claim for leading the trend. Gibraltar and Malta have implemented crypto-friendly laws, while Cyprus has recently created a blockchain innovation hub in order to foster friendly regulations. However, Singapore is taking a very different approach to the regulation of blockchain technology and cryptocurrencies.
Instead of implementing blanket regulations on blockchain technology, Singapore is regulating the use case of the cryptocurrency or blockchain technology that has applied for regulation. This is a new and innovative way to approach regulation, and by the looks of things it appears to be paying off.
Regulation Based on Products, Not Industry-Wide
While this is certainly a somewhat different way to approach regulation, it actually makes a lot of sense. This method of regulating blockchain tech and cryptos means that the regulation is actually a lot more secure, as it’s tailored to the specific cause use the company is offering. Rather than having a blanket law that might not apply in part to one company, this method allows the entire regulatory process to fit the company’s needs. This means that regulatory approval is easier for companies, as they don’t have to fit criteria that doesn’t apply to them. This also means that more companies are regulated and therefore investors and users of the crypto of blockchain are safer.
Looking at The Finer Details
The Monetary Authority of Singapore (MAS) has previously said that it has clear definitions regarding the types of cryptos available. Once one has been categorized, it will then scrutinize it further, applying specific regulations to it. The MAS will pass deeper scrutiny on tokens that hold some form of economic property – such as payment tokens and securities – due to the fact these tokens will operate in a highly regulated financial market. Utility tokens are given something of a free reign, as they don’t post a risk to economic conditions or require a form of legal regulation.
Japan Feels the Pressure
The regulation situation over in Japan is quite the opposite. Japan is applying regulations on all blockchain and crypto activity. This has resulted in a massive backlog of applications, and the Japanese Financial Services Agency has had to hire more staff to cope with the huge demand. Singapore’s method means that cases take less time to review, as the regulations will be molded to each specific project and company.
Singapore is definitely leading by example and a lot of countries could learn from its unique approach. While not all countries and regulators agree with the approach Singapore is taking, it appears to be working, as the country’s blockchain industry is growing faster than most.