In response to the raging curiosity about the next move of the Monetary Authority of Singapore (MAS) on crypto, Senior Minister Tharman Shanmugaratnam has said Singapore is considering new rules to protect consumers.
He said Singapore wants to impose more restrictions on the crypto space after plunging digital-asset prices triggered a series of high-profile crypto blowups, including firms based in the city-state. The restrictions will surely affect the cryptocurrency trading platforms available in Singapore.
According to a MAS parliamentary reply published Monday (July 4), Shanmugaratnam said MAS has already gone further than many other regulators to try and cut down on crypto marketing and advertising in public areas. He said, “MAS has been carefully considering the introduction of additional consumer protection safeguards,” listing the vision of the MAS, “These may include placing limits on retail participation and rules on the use of leverage when transacting in cryptocurrencies.”
The central bank has repeatedly said that cryptocurrencies aren’t for retail investors this year, as a $2 trillion market selloff engulfed a growing list of players. Terraform Labs, whose TerraUSD Stablecoin imploded in May, is based in Singapore, as was Three Arrows Capital, the crypto hedge fund ordered into liquidation last month after failing to repay creditors.
The MAS last week reprimanded Three Arrows for providing false information and exceeding the limit on assets under management. It’s continuing to investigate the fund for more rule breaches.
Authorities in the city-state have long maintained a wary embrace of crypto, granting just 14 firms the regulatory nod to provide digital token payment services locally, a fraction of almost 200 applicants.
Singapore has clamped down on crypto marketing and requires virtual asset providers to be licensed locally, even if they only do business overseas. According to the parliamentary reply, MAS has been “carefully” looking into more consumer protection safeguards, including limits for retail participation and rules on leverage as crypto is used in transactions. The agency also noted that because of the borderless crypto markets, there is a need for global regulatory coordination and cooperation.
The MAS has also taken steps to prevent “cryptocurrency trading from being portrayed in a manner that trivializes its risks.” Any entity working in Singapore must comply with new guidelines, and officials have even removed crypto ATMs from public areas and taken down crypto advertising on public transportation.
The MAS’s Chief Fintech Officer Sopnendu Mohanty recently said the regulator is “brutal and unrelentingly hard” on any bad behavior in the crypto market. But he has also commended major players in the industry like Binance and Crypto.com for efforts to create a responsible and compliant industry.
Governments worldwide are increasingly scrutinizing the industry amid a major meltdown in crypto markets.
Singapore’s Crypto Adoption
At the end of 2021 — a year in which Bitcoin (BTC) and Ether (ETH) rose 100% and 300%, respectively — global crypto rating company Coincub ranked Singapore as the most crypto-friendly country in the world due to its “robust economy, positive legislative environment, and high rate of cryptocurrency adoption.”
According to one survey, 43% of Singaporeans own cryptocurrency. In comparison, the overall crypto ownership rate is 11.3% in South Africa, 10.5% in the United States and 9.8% in Sweden.