The Monetary Authority of Singapore (MAS) — the country’s central bank — is reportedly considering whether to issue digital-only licenses for online banks to operate their businesses, according to e-commerce news platform PYMNTS.
The MAS said in an email to Bloomberg, “We have been engaging relevant stakeholders to ascertain the unique value that such entrants could bring to our banking landscape, and understand how potential risks will be managed and contained.”
The Singaporean regulator stated that it has been open to digitization in the banking and financial sector, noting that since 2000, Singaporean lenders have been able to launch digital-only businesses in the country.
Singapore’s central bank has been experimenting with blockchain technology for some time through projects with partners in the financial industry, such as sending currency to Canada’s central bank via their blockchain networks.
DBS Chief Executive Officer Piyush Gupta said in an interview with Bloomberg that digital banks and local banks are not in competition with each other. “To my mind, that’s just basically giving a few more banking licenses,” Gupta reasoned.
However, he cautioned that there may be issues arising from digital bank licenses if the rules for digital-only banks are less strict compared to traditional banks, adding that the country’s financial authorities should ensure that they do not create an “uneven playing field.”
Meanwhile, OCBC Chief Executive Samuel Tsien stated in an email to Bloomberg that the rise of banks that offer digital-only services in Singapore is a certainty, while saying that the business model of the digital banks would depend on each operator.
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