Singapore introduces two proposals for strengthening crypto regulations in the country.
The Monetary Authority of Singapore (MAS), the central bank and financial regulatory authority of Singapore, has introduced several regulatory proposals for the local crypto industry.
More particularly, MAS published two consultation papers offering regulatory measures to “reduce the risk of consumer harm from cryptocurrency trading and to support the development of stablecoins.”
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According to the press release shared on October 26th, the newly imposed measures will be a part of the Payment Service Act (PSA).
In the introductory section of the MAS proposition overview, the institution noted that trading cryptocurrencies is risky and is not designed for the general public.
Cryptocurrencies play a supporting role in the broader digital asset ecosystem, and it would not be feasible to ban them. Therefore, to reduce the risk to consumers from speculative trading in cryptocurrencies, MAS will require that DPT service providers ensure proper business conduct and adequate risk disclosure.
One of the introduced proposals focuses on three broad categories: consumer access, business conduct, and technology risks. The first category, “consumer access,” notes that digital payment token (DPT) providers will have to openly disclose any risks related to trading crypto, allowing investors to make informed decisions about whether or not to indulge in such activities.
In the second category, “business conduct,” DPT service providers are asked to “implement proper segregation of customers’ assets” and establish a complaint-handling process. Lastly, “technology risks” would obligate DPT service providers to “maintain high availability and recoverability of their critical systems.”
In regards to stablecoins, MAS aims to regulate the issuance of stablecoins, “which are pegged to a single currency (“SCS”) where the value of SCS in circulation exceeds S$5 million.”
Under the new proposal, stablecoin issuers would be required to indicate value stability, reference currency, provide disclosures and meet prudential standards. MAS noted that stablecoins could be pegged only to the Singapore dollar or G10 currencies, such as the United States Dollar (USD), Euro (EUR), and British Pound (GBP).
When talking about the proposals, MAS Deputy Managing Director Ms Ho Hern Shin, said:
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.
The regulator invited all interested crypto community members to share their comments until December 21st, 2022.
In other news, the International Criminal Police Organization (INTERPOL) is reportedly planning to set up a specialized crypto crime unit in Singapore to aid the government in fighting crypto-related crimes.
