Singapore’s Chief Financial Technology Officer, Sopnendu Mohanty became the first official in the capacity of a financial regulatory body, to reiterate that ‘native tokens’ are inseparable from decentralised blockchain.
In his address in Saudi Arabia at G20 Forum of heads of national banks and development officers, Mohanty emphasised the integral role of ‘token’ in the blockchain technology. His comments come on the back of routine official ‘talk’ by regulatory bodies that only the decentralized blockchain technology component can be adopted by national financial systems; while, tokens, or cryptocurrency associated with such as decentralised blockchain need not be adopted.
Advocating sensible regulation
As the head of fintech at the central monitoring agency, Monetary Authority of Singapore, Mohanty has been spearheading the drawing up of guidelines and regulatory framework for cryptocurrency monitoring by government bodies.
The emphasis by such practitioners as Mohanty and his ilk is that the digital token is native to the chain block and necessary for the incentive system for this type of currency.
Additionally, the security model of such a distributed system brings transparency to the system since it is open and is operable without needing permissions. Thirdly, the recording of transactions is inbuilt, open and cannot be censored. Considering the above facts are the premise for regulatory frameworks is essential, Mohanty opines.
He says that it is best to “quash this false narrative that’s been going around for the past two years that you can separate blockchain from crypto. You can’t.” His official statement reiterates the positioning of the Singapore government’s commitment to the cryptocurrency transactional framework.
However, the architects and the community of these virtual currencies have been advocating to governments and policy makers in their respective countries that ‘distributed database’ system. They affirm that cryptocurrency offers more efficiency because of the decentralised structure and focus on distributed database.
Policies for crypto-tokens
The chief fintech officer shared that it is critical that regulators in any part of the world, see crypto tokens as the new avatar of economic systems. It needs to be addressed as a new type of technology which will accentuate and take coordination of economic activities to a new level. Hence, the age-old policies, legal framework will not be relevant in the neo-crypto economic age, Mohanty said.
His sentiments appear to be in-line with regulatory authorities of many of the cryptocurrency economies such as Singapore’s MAS, Switzerland’s Financial Market Supervisory Authority, Malta, Bermuda and several of the state governments across the United States of America.
It has to be said that earlier, the Securities and Exchange Commission in the US was pursuing a policy which was anti-Mohnaty’s offerings. Chairman Jay Clayton in February had commented to the Senate that, “I believe every ICO is a security.”
This had led to wide-spread far among ICO issuers and many had therefore preferred to remain away from the US markets. At the same time, there has been a boost in issuance of ‘security tokens.’ These tokens addressed the demand from investors for more efficient means of ‘selling’ crypto for purposes of investments.