Bitcoin can be regulated in a number of ways and control of the operators is the choice that Singapore officials decided to make.
Exchanges under watch
So, looks like Singapore government decided to put all paperwork in the hands of the Bitcoin traders. Quite convenient indeed, why regulate transactions if one can just take a sneak peek at those who commit the acts of turning fiat into digital coins and back.
This idea came from the Monetary Authority of Singapore (MAS) previous Thursday. Ong Chong Tee, the Managing Deputy Director has supported the government’s intention with a warning statement that users of the cryptos “should take note of the broader risks that dealing in virtual currencies entails and should exercise the necessary caution.”
Although it is easier said than done. There features to Bitcoin and the cohort of altcoins that followed it that are hard to control in legal way. Most of the laws do not have paragraphs about the official position on digital currencies.
Some countries manage to find analogy in terms of law that are easy to use regarding cryptocurrencies. Japan, for example found that it is much easier to see Bitcoin as goods – “not a currency but taxable” or something like that.
Bitcoin as virtual commodity
Singapore took another way – the officials just added cryptos to the laws that cover money laundering through “virtual commodities,” taking the overall legal framework and defending users from the possible frauds.
However, this protection does not involve “safety and soundness” of the intermediaries nor the transactions themselves. The additional measures will be discussed with other branches of the official regulators, but so far, it is as good as it gets.
As regulations imposed on Bitcoin make it more practical to be used by businesses and services, these are usually awaited with impatience. Therefore, when government puts its hand on the pulse, the country’s Bitcoin enthusiasts can begin developing their infrastructure according to law, without cautions peek over the shoulder, as if they are criminals.
“This really sets Singapore out as the global leader of virtual-currency regulation, as less professional outfits engaged in questionable activities are regulated out of the market, consumers win.”