Digix’s Regulatory Approach
This is a brief recap of Digix’s approach on the regulatory front. We wanted to give the public an idea of what goes on behind the scenes at Digix (apart from coding!)
Singapore’s Regulatory Stance to Blockchain Technology
In Singapore, (since this is where Digix is based), 2 significant pieces of information are worth mentioning:
- In May 2016, Dr Vivian Balakrishnan, the Minister-in-charge of the Smart Nation Initiative in Singapore, has stated that
“ ..the Monetary Authority of Singapore (MAS) has decided that we will create a “regulatory sandbox” for financial institutions and Fintech companies that creates a safe and conducive space for innovation, within which the consequences of failure can be contained. You will not be smothered by regulations; until you become big enough to actually be a threat to the financial system but at that point you would already be considered a success. What this means is that if any of you have an idea, product or service in financial industries — you can work with MAS to launch your product in the sandbox within controlled boundaries. This gives you opportunities to start-up, experiment and grow as quickly as you can.” (source)
2. During the National Day Rally Speech in August, Singapore’s Prime Minister has also mentioned that that there were two ways to respond to new technology: To close Singapore off and try to stop people from using the new technology; or embrace change and let the disruption happen. (source)
Why are these statements important? Because it adds to the confidence we have at Digix when we began building our company 2 years ago, that we can continue to strive to innovate, focus and push the boundaries of new technology without being stifled or fearful of regulation.
Digix’s Advocacy and Regulatory approach
- Continual engagement with our lawyers, regulators and governing bodies in Singapore in relation to our core business activities.
Digix spends a considerable amount of time engaged with local authorities by being completely transparent and upfront about our business model. Whenever there is an update to our business model, we make sure to inform the relevant governing bodies. We have a trusted, hardworking legal team supporting us who are making sure our voices are heard.
We are glad that our regulators are tremendously rational, receptive, listening, and less circumspect when it comes to this new distributed technology so that we can continue to focus, innovate and push the boundaries.
2. Going above and beyond what is required of present legal requirements for current business, ie AML / KYC processes
MAS considers virtual currencies as non legal tender nor securities, with gold being classified as commodities.
Does that mean that Digix willfully ignores the need for due diligence on their customers, and allow an anonymous user to send us 1000 bitcoins to purchase DGX tokens without any question since only virtual currencies are being dealt with? Absolutely not.
Being fore runners in this space, we have taken the proactive and prudent approach to make sure that due diligence is done to prevent illicit activities occurring on our platform. Hence, in DGX 2.0, we have instituted KYC processes within our application.
3. Running the largest Ethereum Meetup Group in Asia to promote the technology
Digix runs a non profit Ethereum Meetup Group in Singapore, organizing events aimed at promoting the use of Ethereum to the general public. It was started a year ago and we now have 700+ members. Just to put the numbers in perspective, the second largest meetup group out in HongKong stands at 450+ members. We host and run events that have no relation to our business, but aimed at promoting Ethereum to the general public. Vitalik has attended several of these events and recently was around for a technical lesson for developers on Ethereum.
These are just some of the activities we work on at Digix apart from app development, which we thought the public might be interested in.
We are looking forward to seeing you at DevCon2!