- POSTED: 21 Feb 2014 18:01
The Monetary Authority of Singapore will closely monitor how widely virtual currencies are used in Singapore, the risks they pose as well as international developments, and will consider the need to introduce regulations where appropriate.
SINGAPORE: The Monetary Authority of Singapore (MAS) will closely monitor how widely virtual currencies are used in Singapore, the risks they pose as well as international developments, and will consider the need to introduce regulations where appropriate.
Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said this in a written answer to questions from Nominated Member of Parliament Mary Liew on Friday.
Ms Liew had asked whether the government will regulate the use of virtual currencies such as Bitcoins traded by Singapore-based businesses and Singaporean consumers, and whether there are plans to educate Singaporeans on the risk of trading or investing in virtual currencies.
Mr Tharman also said MAS has been advising individuals and businesses to think twice and be cautious about accepting or dealing in virtual currencies.
He noted that many countries have likewise warned of the risks of accepting or trading in virtual currencies, though there is currently no international consensus on the regulatory treatment of virtual currencies.
MAS currently does not regulate Bitcoins, which are not legal tender like the notes and coins issued by MAS.
They are also not considered securities under the Securities and Futures Act.
But Bitcoins are not without risk.
Unlike legal tender such as the Singapore dollar, which is issued and backed by the government, there is no legal obligation for individuals or businesses to accept virtual currencies.
Virtual currencies like Bitcoin are typically not backed by an identifiable organisation.
As a result, should the virtual currency cease to be accepted or the scheme ceases to operate, users may not be able to obtain a refund of their monies.
The value of virtual currencies can also fluctuate greatly within a short period of time.
MAS has published a consumer alert to warn Singaporeans about these risks.