Singapore to Tighten Crypto Trading Restrictions
International Business News – The Monetary Authority of Singapore is considering new measures to tighten restrictions on retail investors trading cryptocurrencies.
Many retail investors appear to be “irrationally disregarded” about the risks of trading cryptocurrencies, and these new measures will make it harder for them to trade cryptocurrencies, said Ravi Menon, chief executive of the Monetary Authority of Singapore, on Aug. 29. “Regulators around the world now have a greater incentive to strengthen regulation in the cryptocurrency space, and the Monetary Authority of Singapore will do the same,” he said.
Ravi Menon noted that the MAS’s new measures could include customer suitability tests, as well as restrictions on the use of leverage and credit instruments by retail investors to trade cryptocurrencies. He elaborated on previous remarks about the authorities’ plans to expand the industry’s rules, and said Singapore planned to hold a public consultation on the proposals by October.
Ravi Menon reiterated that the volatility of cryptocurrencies makes them unsuitable for use as money and is “highly dangerous” for retail investors. But he also said that tokenized and distributed ledgers that record the ownership and transfer of ownership of digital assets offer economic potential. It is reported that Singapore has been researching blockchain technology very early and has the ambition to become a global cryptocurrency center. Singapore is now trying to strike a balance between encouraging blockchain innovation and protecting investors from some of the risks of this market.
The Monetary Authority of Singapore began tightening cryptocurrency investment rules earlier this year and banned service providers from advertising and promoting cryptocurrencies to the public. In addition, the agency requires virtual asset providers to be licensed locally, even though they may only operate overseas.
In recent weeks, the Monetary Authority of Singapore has further stepped up its scrutiny of the industry. The agency sent a questionnaire to some applicants and holders of digital payment licenses, seeking details about their business activities and holdings. Of the nearly 200 applicants in Singapore so far, just over 10 entities have been licensed to operate as digital service token providers.
Ravi Menon said that given the high number of applicants, MAS prioritized those applicants who demonstrated “strong risk management skills”. He also added that the due diligence process takes a long time. “But it is necessary.” “As the scale and complexity of digital asset activity has grown rapidly, other risks have surfaced. As a result, global regulators, including the Monetary Authority of Singapore, are stepping up their efforts to address these new risks,” he said.