MAS said it discourages the public from speculative trading in cryptocurrencies.
Singapore:
Singapore’s central bank has proposed new regulatory measures on cryptocurrency trading and stablecoins to reduce the risk of consumer losses from industry volatility.
The measures, published in two consultation papers on Wednesday, include not allowing businesses to lend cryptocurrencies owned by retail clients and ensuring that client assets are segregated from their own assets.
Cryptocurrency trading businesses will also not be allowed to offer incentives to attract retail customers, nor will they be allowed to accept credit card payments or provide financing to retail customers.
The Monetary Authority of Singapore (MAS) has stated that it discourages the public from speculative trading in cryptocurrencies and has already banned advertising of cryptocurrency services in public places.
“…Cryptocurrencies play a supporting role in the wider digital asset ecosystem, and it would not be possible to ban them,” MAS said in a media release. The proposed measures will help in risk mitigation.
In addition to addressing money laundering, terrorism financing, technology and cyber risks, MAS said it seeks to ensure that regulated stablecoins have a high degree of stability.
In the case of stablecoins that are pegged to a currency (SCS), where the value in circulation exceeds S$5 million ($3.53 million), issuers are required to provide at least equivalent cash, cash equivalents or short-dated sovereign debt securities. Reserved property should be kept in 100% of the par value of SCS outstanding in circulation. Assets must also be denominated in the currency in which the denominated currency is.
All SCS issued in Singapore can only be pegged to the Singapore Dollar or any Group of Ten (G10) currency.
Banks in Singapore will be permitted to issue SCS and no additional reserve support and prudential requirements will apply, the statement said.
Currently, there is only one stablecoin issued in Singapore.
The Asian financial hub initially attracted major crypto businesses such as Binance, but some left the city-state earlier this year and moved to the United Arab Emirates, citing strict regulatory restrictions in Singapore.
It is unclear when the proposed measures might be brought in place, but the public has been invited to respond by 21 December.
(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)
