Straits Times
18 Mar 2014
Melissa Tan

Singapore’s move to introduce new rules around virtual currencies such as the bitcoin has put it ahead of the pack. Now it should try to stay in the lead.

SINGAPORE’S regulator last week proposed new rules on exchanges and vendors of virtual currencies, becoming one of the first in the world to do so.

The MAS said the move was a pre-emptive one, aimed at thwarting potential money laundering and terrorist financing. Since the bitcoin allows people to transfer digital money between one another anonymously, it is ripe for exploitation for these financing crimes. MAS will put up its proposals for public consultation soon, and plans to turn them into law within the next 12 months.

Mr Greg Unsworth, who heads technology, media and telecommunications at Pricewaterhouse- Coopers, suggests that the bitcoin be regulated as a “hybrid” since it has attributes of both a currency and a commodity.

As bitcoin usage spreads, there will be a need to extend regulations to cover consumer use, said Mr Jonathan Kok, a partner at law firm RHTLaw Taylor Wessing.

But as Mr Rajesh Sreenivasan, a technology lawyer at Rajah and Tann, warned, rules must be flexible and adapt to fast-changing tech realities.

“It’s still early days. Exchanges seem to be the hot thing today, but they could become redundant in future. The bitcoin could be the flavour today but not tomorrow, and we need to be ready for that.”