Singapore Licenses Crypto Platform GSR Markets

Regulators in Singapore have given a license to cryptocurrency market maker GSR Markets.

As Bloomberg News noted in a report late Wednesday (April 3), the move is a rare one for the digital asset space, where liquidity providers such as GSR still — in most cases — function without regulatory permits.

Xin Song, CEO of GSR Singapore, said the company is among the first of its kind to be awarded a Major Payment Institution license from the Monetary Authority of Singapore (MAS). The license allows GSR to conduct spot over-the-counter and market-making services within the city-state’s regulatory guidelines.

As noted here in February, Singapore, already renowned for its leadership in the Web3 space, has also been proactive in backing FinTech solutions.

Last year, the city-state’s central bank set aside $112 million to strengthen local FinTech initiatives, especially those leveraging emerging Web3 technologies. Singapore has also attracted major crypto platforms like Blockchain.com, Circle, Crypto.com and Coinbase, which have applied for licenses to do business within its jurisdiction.

Still, authorities there have worked to limit speculative crypto bets by mass-market retail investors after the “crypto winter” of 2022.

The Bloomberg report says that Singapore earlier this week widened the scale of its digital-asset regulation to custody, as well as to all companies dealing with cryptocurrency-related fund transfers, no matter if they come into possession of the money or tokens.

And last year, MAS Managing Director Ravi Menon argued that private crypto will eventually be replaced by a monetary system governed by central bank digital currencies (CBDCs), “well-regulated” stablecoins and tokenized bank liabilities.

Private digital coins “have miserably failed the test of money because they can’t keep value,” Menon said at a Hong Kong Monetary Authority–Bank for International Settlements (BIS) event.

“Nobody keeps their life savings in these things,” he added. “People buy and sell these things to make a quick buck. Private cryptocurrencies, which are native digital tokens, don’t meet that test, so I think that they will eventually leave the scene.”

The Bloomberg report also notes that GSR and other market makers are in the midst of a renaissance thanks to the jump in the price of bitcoin, which has led to a broader spike in the market for cryptocurrencies.