Singapore issues new regulations on crypto trading

Category: Asia Crypto Regulatory

The Monetary Authority of Singapore (MAS) has suggested new regulations when it comes to crypto and stablecoins trading. 

MAS urges retail investors to take risk test before crypto trading

The country’s central bank said this represents a step towards reducing the risk of consumer damage that comes from overall crypto volatility.

The proposals are presented within two consultation papers and include a provision that says businesses can not use cryptocurrencies owned by their clients for trading and must segregate clients’ assets from their own. Retail investors will, therefore, have to take a risk test before cryptocurrency trading.

Businesses would also not be allowed to lure retail customers, accept credit cards or offer to finance to retail customers.

MAS said it wants to discourage the public from speculative trading in crypto but is aware that digital assets “play a supporting role in the broader digital asset ecosystem, and it would not be feasible to ban them.” 

In the publication, MAS mentions stablecoins and says that if the value in circulation exceeds SGD$5 million ($3.53 million), “issuers must hold reserve assets in cash, cash equivalents or short-dated sovereign debt securities at least equivalent to 100 percent of the par value of the outstanding SCS in circulation”. 

Public invited to give feedback

MAS Deputy Managing Director for Financial Supervision Ho Hern Shin said the improved regulations are aimed at supporting the development of value-adding payment use cases for stablecoins in Singapore.

“As we continue to partner with industry players to explore the potential benefits of tokenisation and distributed ledger technology, MAS will make appropriate adjustments to its regulatory regime to address the associated risks,” Ho Hem Shin asserted. 

MAS didn’t specify the exact date for bringing in the proposed measures, but has invited the public to give feedback by December 21.

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