At the United Overseas Bank (UOB) 80th anniversary dinner, Lee Hsien Loong, Prime Minister of Singapore, commented that Bitcoin and blockchain technology are going to change the banking industry. Singapore is an important financial center in Asia. And this statement from Loong suggests a bright future for the decentralized technology within the country.

Singapore banks must keep up to date with blockchain development

Long’s ten minute speech was concluded with words of support towards blockchain applications within the banking industry:

“The operation environment has become more challenging, and on top of that, technology is moving very fast, with new business models disrupting traditional banking. For example, more and more people are making payments through their smartphones, they can pay for taxes, buy movie tickets, shop online, transfer money, pay for goods at restaurants and shops, all on their smartphones. [...] And that’s just on the consumer side of the financial services. There are other technologies, like blockchain, which is used for Bitcoin, but can also be used for many other applications. […] And our banks must keep up to date with these developments.”

Singapore government slightly changed its stance towards cryptocurrencies

Previously, the Singaporean government never recognized cryptocurrencies as something of value. On 21 February 2014 the Monetary Authority of Singapore (MAS) released an answer to a parliamentary question about the matter, and cautioned individuals about the use of virtual currencies:

“MAS currently does not regulate bitcoins. They are not legal tender like the notes and coins issued by MAS. They are also not considered securities under the Securities and Futures Act,” said Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of MAS.

He added, “But bitcoins are not without risk. MAS has published a consumer alert to warn Singaporeans about these risks. 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 cease to operate, users may not be able obtain a refund of their monies.”

Even though bitcoin and the other cryptocurrencies are not yet recognized as legal tender, the position of the Singaporean government clearly changed in favor of blockchain technology in only ten months.