MAS Chief Minister Tells Firms To Discourage Retail Crypto Trading
The Monetary Authority of Singapore has urged financial companies to discourage cryptocurrency trading.
In response to a question in Parliament on 1 August 2022, regarding the licensing of digital payment token providers, the minister in charge of MAS said that the authorities had reached an agreement with international regulators that the sector needs greater oversight.
Tharman Shanmugaratnam added that MAS would consult on its preliminary crypto framework in the coming months.
MAS ‘treads carefully’
Shanmugaratnam reiterated that MAS is still treading carefully regarding cryptocurrencies and discourages the participation of retail investors in trading, citing the “dangerous” nature of cryptos.
This stance echoes sentiments expressed by the MAS in January 2022, when it discouraged speculation by retail investors in assets it deemed volatile. It also shut down crypto ATMs.
On the recent collapse of the TerraUSD stablecoin and the current lending crisis that has seen many notable firms including Celsius, Babel Finance and Three Arrows Capital capitulate, the minister said the wider Singaporean economy is safe from any spillover to traditional markets. He noted that no critical institutions in the city-state have exposure to distressed companies. The capital in the hedge fund Three Arrows comes from Singapore and has recently filed for bankruptcy. The CEO of Terraform Labs, creator of the TerraUSD stablecoin, reportedly lives in Singapore and has been asked to notify South Korean authorities when he returns to the country.
Difficult times for crypto in Singapore
In a report by the Financial Times, the chief financial officer at MAS vowed to take an unrelenting stance against misconduct in the crypto industry.
Binance and Bybit recently exited Singapore in the face of progressively draconian measures imposed by the MAS.
Conversely, Crypto.com has received in-principle approval to operate in Singapore. It is also legal to do business in Dubai.
The head of fintech at MAS, Sopnendu Mohanty, said he expects a digital central bank currency to be issued within three years. In the last week of June, MAS launched a research center to work on the development of a CBDC that seeks to draw customers away from crypto businesses.
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