Singapore Seeks to Reduce Risks for Retail Crypto Investors With Restrictive Rules – Regulation Bitcoin News

Singaporean financial officials have introduced new regulations to help protect investors from the risk of trading or investing in cryptocurrency. Before they are adopted, the measures will also be reviewed with industry.

Singapore prepares to tighten cryptocurrency regulations and limit public access to digital assets

Draft regulations have been submitted by the Monetary Authority of Singapore to limit crypto trading. This is in the interest of reducing the risks associated with digital currencies and promoting stablecoin development. The city-state’s central bank believes the latter are credible as a medium of exchange.

Two consultation papers were published by the authority detailing the proposed measures. The authority is seeking industry feedback. It is planned to adopt the guidelines as guidelines, before finally incorporating them in the Payment Services Act.

“Trading in cryptocurrencies is highly risky and not suitable for the general public,” the MAS reasoned. It also acknowledged the role of digital coins in the ecosystem, and that banning them is impossible.

In an announcement on Wednesday, the monetary authority explained that the proposals cover three main areas — consumer access, business conduct, and technology risks. The monetary authority intends to reduce the risk of speculation trading by creating certain obligations for providers of crypto services.

They will need to provide risk disclosures about cyberthreats and price fluctuation for customers in order to help them make educated decisions. They should refuse to allow investors who are not retail customers to choose credit payment options.

Cryptocurrency platforms will also be required to keep customers’ assets separate from their own funds and may be prevented from lending investors’ assets to third parties. However, these precautions will not prevent users from making decisions about their actions.

The regulations will apply to licensed crypto service providers as well as those who operate under an exemption and are awaiting authorisation. Accredited or institutional investors would be exempt from the stricter regulations.

Stablecoins pegged to single fiat currency to be regulated by the MAS

Praising the potential of “well-regulated and securely backed” stablecoins to facilitate transactions in the digital assets space, the MAS indicated that it plans to expand the regulatory framework for them in order to ensure their stability. The issuance of stablecoins that are pegged to one currency with a circulation greater than 5 million Singapore Dollars (approx. $3.5 million).

According to the new rules, the issuers must have reserves equal to at minimum 100% of the nominal currency of their coins. They can not be pegged to the Singapore Dollar or any Group of Ten currencies (G10). You will be required to issue a whitepaper, satisfy a minimum base capital requirement, and keep liquid assets. According to the authority, domestic banks are allowed to issue stablecoins.

This latest regulation in Singapore comes after a significant financial centre that has also taken steps to become a crypto-hub. It follows intensifying global efforts for regulatory oversight of crypto economies following the collapse of the terrausd stablecoin (UST) and the bankruptcies of Three Arrows Capital, a Singapore-based crypto hedge funds.

“The two sets of proposed measures mark the next milestone in enhancing Singapore’s regulatory approach to foster an innovative and responsible digital asset ecosystem,” MAS Deputy Managing Director of Financial Supervision Ho Hern Shin said in a statement. The proposals are open for comments from interested parties until Dec. 21.

In this story, tags
Consultation papers, Crypto, cryptoservices, Cryptocurrencies. Cryptocurrency. MAS. Monetary authority. Regulations.

What do you think about the possibility that Singapore authorities will adopt tighter crypto regulations in the future? Please comment below with your thoughts.

Lubomir Tasev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Credit for the imageShutterstock. Pixabay. Wiki Commons

DisclaimerThis information is provided for educational purposes only. This is not an invitation to purchase or sell directly, nor a suggestion or endorsement of products, services or companies. is not a provider of investment, tax, legal or accounting advice. This article does not contain any information, products, or advice that can be used to cause or alleged result in any kind of damage.

Get more Crypto News at CFX Magazine