MAS Seeks to Ban All Forms of Crypto Credits in Singapore
Godfrey Benjamin Oct 26, 2022 17:30
The Monetary Authority of Singapore wants crypto service providers to avoid issuing credits for consumers to trade crypto
The Monetary Authority of Singapore (MAS) has issued a new set of guidelines in its characteristic manner to tame the risks inherent in the crypto industry to retail consumers.
The MAS said Digital Payment Token (DPT) service providers must not issue any form of credit facilities to consumers that can facilitate their trading of digital currencies in Singapore.
The guidelines were detailed as the MAS launched two consultation papers as it sought industry guidance on how best to protect consumers from risks, while also enabling the growth of innovations in the space.
The MAS acknowledged that banning digital currencies is no longer an option as they play a very vital role in the broader digital asset ecosystem. It thus noted that it will be in the best interest of all stakeholders that DPT service providers give as robust a risk disclosure to consumers in order to enable them to gauge their risk exposures.
“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. Regulations go hand-in-hand with innovation in financial services,” said Ms. Ho Hern Shin, Deputy Managing Director (Financial Supervision), MAS,
“The enhanced regulatory regime for stablecoins aims to support the development of value-adding payment use cases for stablecoins in Singapore. As we continue to partner industry players to explore the potential benefits of tokenisation and distributed ledger technology, MAS will make appropriate adjustments to its regulatory regime to address the associated risks.”
Per its guideline for stablecoins, the MAS mandates that issuers will need to maintain adequate reserve which will be dominated by the Singaporean Dollar while disclosing redemption modalities and rights that holders have.
The MAS has played a frontline role in regulating the crypto industry, and despite its efforts, indigenous firms like the Vauld Group still collapsed. In the published guideline, the regulator said its role may not necessarily protect consumers, and as such, consumers need to approach the industry with utmost caution.
