Singapore planning to roll out new crypto regulationswritten by Bella Palmer
Recent defaults of some global cryptocurrency-related firms based in Singapore has triggered worries about tighter regulation
Singapore is planning to roll out new regulations that will make it more difficult for retail investors to trade cryptocurrencies at a time when they seem to be “irrationally oblivious” about the risks, its central bank chief said.
Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said at an event on Monday that despite warnings and measures, surveys show that consumers are increasingly trading in cryptocurrencies globally, not just in Singapore, attracted by the prospect of sharp price increases.
They seem to be irrationally oblivious about the risks of cryptocurrency trading, he said.
“Adding frictions” on retail access to cryptocurrencies was an area the MAS was contemplating, he said.
These may include customer suitability tests and restricting the use of leverage and credit facilities for cryptocurrency trading, he added at a seminar titled “Yes to digital asset innovation, No to cryptocurrency speculation.” Singapore’s welcoming approach has helped the financial hub attract digital asset services-related firms from China, India and elsewhere in the last few years, making it a major centre in Asia.
But recent defaults of some global cryptocurrency-related firms based in Singapore, many of which are not subject to the financial regulator’s guidelines on consumer protection or market conduct, has triggered worries about tighter regulation.
The MAS will seek public feedback on its proposals by October, Menon said, adding that reviews are ongoing by regulators globally.
In January, the MAS issued guidelines to limit cryptocurrency trading service providers from promoting their services to the public. Cryptocurrencies have plunged this year, as U.S. interest rate increases and runaway inflation prompt investors to ditch riskier assets.
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