Singapore National Bank Rules to Tackle Crypto Speculation
Recently, the Monetary Authority of Singapore (MAS) promulgated its final document addressing proposed regulatory frameworks for cryptocurrency service entities. In this announcement, MAS clearly delineates its unwavering approach, offering the appropriate law to regulate retail crypto trading.
As of now, the central bank of the country does not favor any form of speculative behaviors by retail investors and has already communicated its vision to crypto companies. This includes but is not limited to providing financial leveraging options, engaging in margin transactions, and offering incentives for trading activities related to cryptocurrencies. The MAS aims to prohibit accepting payments through locally issued credit cards and demand an assessment of customers' understanding of risk before granting access to these services.
Singapore's endeavor to establish a judicious equilibrium in cryptocurrency regulation and attract the industry as a whole is epitomized by this regulatory initiative. The Monetary Authority of Singapore (MAS) currently discloses its second-phase response to feedback received on proposed regulations for Digital Payment Token (DPT) service providers within Singapore. In Jul, MAS unveiled an initial phase that imposed an obligation on these providers to segregate customer assets under a statutory trust—aiming at safeguarding them—with completion targeted by the end of the year.
Angela Ang, a former MAS regulator and current senior policy advisor at TRM Labs, notes the nuanced shift in recent decisions by the MAS towards less stringent measures. This includes incorporating cryptocurrencies into customers' net worth calculation despite their consistent opposition to speculative retail trading. The adjustment represents an openness of MAS to blend industry feedback within its regulatory structure - a testament not only to steadfast regulation but also flexible policy-making approach.
Notably, the Monetary Authority of Singapore (MAS) has relaxed the qualification demands required to become an accredited investor. It now recognizes certain crypto assets towards a threshold of S$2 million ($1.5 million). Furthermore, MAS provisionally delegates power to exchanges to establish their token listing standards. And yet, this permission is conditional upon transparent disclosure of conflicts of interest and the existence of adequate customer dispute resolution mechanisms. This approach differs significantly from Hong Kong's stricter stance that allows only tokens that fulfill explicit regulatory requirements.
The MAS, in a novel move for crypto service providers, has established rigorous requirements concerning high availability and risk incident reporting. It aligns these stipulations with the current expectations imposed on conventional financial institutions. As for these regulations' implementation, the phased deployment begins in mid-2024.