While other governments fret about how excessive decentralization could make them lose control over parts of their local economies, Singapore is taking the bold step of fully allowing decentralized exchanges to exist in harmony within its ecosystem. A proposal (PDF) published by the Monetary Authority of Singapore (MAS), the country’s central bank, asks that the current “recognized market operators” model be changed to a three-tier system.
“MAS has observed the emergence of new business models in trading platforms, including trading facilities that make use of blockchain technology, or platforms that allow peer-to-peer trading without the involvement of intermediaries. As the current RMO regime has been in place since 2002, it is timely to review the regulatory framework for market operators to ensure that it continues to meet the demands of the changing landscape,” the organization wrote.
The MAS suggests recognizing operators under a system that puts them in one of three categories.
- Tier 1, where a company has “limited access” to the country’s retail investor market,
- Tier 2, where a company sits well in current rules, and finally
- Tier 3, where a company is very small, and doesn’t have the same level of “prestige” offered to bigger operators.
Under Singaporean financial law, companies that wish to maintain a foothold in the market must grow to a particular size before being considered a “recognized market operator,” much to the dismay of smaller blockchain startups that haven’t seen as much activity since their inception. However, the new Tier 3-level requirements are designed with such companies in mind and will help them gain a foothold in the market.
“As market operators grow in size, they will have to move up the regulatory tiers and be subject to a step up in regulatory requirements and supervisory intensity,” the MAS clarified.
The MAS’ proposal is not a survey document that makes a passing mention at blockchain technology; Singapore has already made a strong statement in support for all sorts of fintech ventures by shortening the wait time for patent approval.
This article appeared first on Cryptovest
