Singapore Has Launched Code of Practice for Cryptocurrency
There is now a Code of Practice for cryptocurrency in Singapore. It was launched by the Association of Cryptocurrency Enterprises and Startups Singapore (ACCESS) in partnership with multinational law firm Linklaters and in partnership with the Association of Banks in Singapore. It also has the support of the Monetary Authority of Singapore (MAS).
Asia Blockchain Review explains that ACCESS’s Code of Practice was created for “all participants in the cryptocurrency realm in Singapore, extending from cryptocurrency custodians and blockchain service providers to payment and remittance firms and exchanges.” The report also states that the proposed code is “a collection of standards focused on good practices related to cryptocurrency.” It outlines measures that will counter money laundering and prevent the financing of terrorism. Compliance with the code, however, is not compulsory, rather voluntary. Nevertheless, ACCESS encourages companies that accept or use cryptocurrencies to assess for themselves any risks involved.
And there are certainly risks involved with cryptocurrency. Recently ESET researchers discovered fake cryptocurrency wallets on Google Play. Of note, the researchers found out about a malicious app impersonating popular cryptocurrency wallet Trezor. It is connected to a fake cryptocurrency wallet app called “Coin Wallet” that is capable of scamming unsuspecting users out of money. Such a case underscores the need for companies to be vigilant about digital currencies. It also highlights how having a Code of Practice can be useful in Singapore (and maybe in other countries eventually) given the increasing popularity of digital currencies.
This Code of Practice might soon get a high-profile test case in the form of Facebook Libra. This particular digital currency is still in the pipeline, and is due to be launched in 2020. An FXCM post on ‘What is Facebook’s Libra?’ explains how it was created to be used on several social networking sites including Facebook and WhatsApp. Social media’s vast amount of users makes adoption highly likely. But it will be heavily scrutinised. Already CNBC reports that Facebook Libra has so far been criticised heavily, with global regulators, central bankers, and finance ministers all voicing their concerns about it. Mainly the issues are connected to privacy, given Facebook’s well-documented run-ins with data breaches. Consumer protection is also an issue here along with the possibility of Libra being used for money laundering.
The launch of Singapore’s Code of Practice for cryptocurrency will make it near impossible for Libra to be accepted in the country. At the moment it is already facing scrutiny from the MAS. “It is in the early stages of development, with a number of issues to be worked out around its features, use cases, and governance arrangements,” said central bank Senior Minister Tharman Shanmugaratnam about Libra. He did, however, promise that MAS “will make an informed assessment of the potential benefits and risks of Libra once these details become clear.” By that time the aforementioned Code of Practice will likely be institutionalised, and compliance made mandatory. It will then help guide MAS in making a more informed decision not only on Libra, but also on other digital currencies.