The Monetary Authority of Singapore (MAS) on Wednesday revealed two session papers proposing regulatory frameworks to cut back traders’ danger in crypto buying and selling and help stablecoins for transactions. The measures together with client entry, enterprise conduct, and know-how dangers are a part of the Payment Services Act. The MAS bans retail traders from utilizing bank cards and borrowing funds to buy cryptocurrencies.
Singapore’s Central Bank Proposes Crypto Trading, Stablecoins Measures
In a press release on October 26, The Monetary Authority of Singapore introduced proposed measures to cut back crypto buying and selling dangers for retail traders. Moreover, regulate the issuance of stablecoins pegged to a foreign money.
The MAS considers cryptocurrencies vital within the digital asset ecosystem and received’t ban them. Therefore, the MAS requires crypto buying and selling suppliers comparable to crypto exchanges to make sure enterprise conduct and satisfactory danger disclosure.
The crypto service suppliers should prohibit retail traders from utilizing bank cards and leverage for crypto buying and selling. Also, the service suppliers will deal with the segregation of consumers’ property and mitigate client complaints. On the know-how dangers, the MAS desires corporations to keep up the excessive availability and recoverability of crucial programs.
Furthermore, the MAS will regulate stablecoins as a medium of change within the digital asset ecosystem. It goals to broaden the regulatory framework for stablecoins to make sure a excessive diploma of worth stability. Moreover, stablecoin issuers are required to publish a white paper with all particulars comparable to redemption rights.
Interestingly, well-regulated and securely backed stablecoins will likely be most well-liked by the MAS. Also, banks can problem stablecoins with out further reserve backing and prudential necessities. The final date for feedback on the proposals is December 21.
Ms Ho Hern Shin, Deputy Managing Director of the MAS, stated:
“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.”
Singapore’s Strict Stance on Crypto
While the MAS considers cryptocurrencies important for the digital asset ecosystem, the latest crash of Singapore-based crypto corporations led to a strict stance on crypto. The proposed laws additionally stop staking and lending to generate yields.
The crash of crypto companies comparable to Three Arrows Capital, Terraform Labs, Zipmex, Vauld, and Hodlnaut triggered Singapore to introduce a stringent crypto regulatory framework. Recently, Coinbase and Blockchain.com obtained licenses in Singapore.
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