Blockchain Association of Singapore opposes token lending ban
Singapore’s central bank had previously proposed to introduce a ban on the lending of digital tokens to private customers by crypto firms. The Blockchain Association of Singapore, a main crypto lobby group, has opposed this proposal, claiming it is “far too restrictive.” They also disagreed on the proposal for a complete ban on crypto firms that extend incentives to the retailer, calling it “too draconian.”
As for token lending, they argued that such a decision will force the dealers to get funds from the crypto firms that are unregulated, as stated in the 11-page feedback sent by the group to the Monetary Authority of Singapore, in the later stages of December.
The Blockchain Association of Singapore’s disagreement
Singapore came up with many more proposals to protect traders from the unpredictable crypto market. They also called for the restriction of crypto firms from lending or staking their coins to increase returns. Individuals will not be able to take out loans to buy tokens if the law is passed. However, the association stated that lending tokens can provide money to customers. The interesting part about digital payment chips is the interest rates on them.
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However, the association agreed that there should be certain restrictions on individuals borrowing money from firms to buy cryptocurrency. It also suggested that instead of banning incentives from retail businesses, it should be regulated. It can be shaped to give “gifts not linked to financial purchases.”
Chia Hock Lai, the head of the association said,
“We propose a more targeted and targeted approach, including doubling down on informing consumers about the risks of dealing with unregulated entities and increasing enforcement activities on those who engage in regulated activities without the necessary regulatory approvals,”
while speaking to Bloomberg.
“While the proposed measures are well-intentioned, they could have unintended consequences if implemented in full, including driving consumers towards unregulated service providers,”
Lai added.
What prompted such a regulation to be proposed?
Last year, Singapore saw its city-state company The Three Arrows Hedge fund collapse. It was one of the biggest hedge funds to go under. The proposal came after this. Later, FTX collapsed and serious questions have been raised about the regulations of cryptocurrencies.
Also read: US SEC targets FTX investors, questions their due diligence
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