April 26, 2024

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[THE INVESTOR] SINGAPORE -- More regulatory sandboxes for blockchain are needed as authorities are out to improve the industry overhead, according to experts from both public and private sectors at Money 20/20 Asia, a regional edition of the largest global fintech conference being held in Singapore this week.

A regulatory sandbox is a framework set up by a regulator that allows fintech startups and other similar innovators to conduct live experiments in a controlled environment under a regulator’s supervision. More and more financial markets are adopting it to minimize the impact of failed enterprises.

“Sandboxes are much smaller so it’s easier to see if things work,” said Anna Wallace, head of Innovate, Financial Conduct Authority, a financial regulatory body in the UK. Wallace added that sandboxes will allow regulators to understand the technology better and find more ways to apply them in real life. 

From the left, Sagar Sarbhai, head of regulatory relations for APAC and Middle East of Ripple; Anna Wallace, head of Innovate, Financial Conduct Authority; Sopnendu Mohanty, chief fintech officer, Monetary Authority of Singapore; and Remington Ong, partner at Fenbushi Capital attend a session at Money20/20 on March 15. Park Ga-young/The Investor

She and others also pointed out that forming a concerted, global approach on ICO regulations are more appropriate than going country by country. They added that the regulations should be devised so that the technology itself evolves.

“It is important that regulators don’t regulate the technology, you need to regulate only the bad acts surrounding the technology,” said Sopnendu Mohanty, chief fintech officer, Monetary Authority of Singapore, the city country’s central bank. “This year will be critical for regulators to come together and set a set of guidelines.”

Sagar Sarbhai, head of regulatory relations for APAC and Middle East at payment technology company Ripple agreed, saying that the G20 countries will likely come up with some sort of rules in their upcoming summit meeting at Buenos Aires on March 19-20.

The regulations would likely to focus on anti-money laundering and know your customer rules, Mohanty said.

Meanwhile, the tipping point for wide adoption of cryptocurrencies will be the appearance of a killer app which can include cross-border transfers and consensus on the asset ownership of virtual currencies, he added.

By Park Ga-young (gypark@heraldcorp.com)