Singapore Takes Measures to Reduce the Risk of Crypto Trading
- MAS proposed measures that would reduce the risk to consumers from crypto trading.
- Stablecoin-related activities are also addressed by regulators.
- The proposed measure will be focused on consumer access, business conduct, as well as technology risks.
The Monetary Authority of Singapore (MAS), proposed measures Wednesday to reduce risks associated with crypto trading and improve regulation of stablecoin-related activity. MAS published consultation papers, which suggested that retail investors should not borrow money or use credit cards in order to buy crypto. It also advised users against lending out digital tokens for yields.
Today, MAS published 2 consultation papers proposing regulatory steps to reduce consumer harm from cryptocurrency trading. They also propose to support the development stablecoins to be a credible medium for exchange in the digital asset eco-system. https://t.co/nuww37bt0S
— MAS (@MAS_sg) October 26, 2022
MAS explained that the proposed measures will be focused on three areas: consumer access, business conduct, technology risks.
MAS explained that the current regulatory framework focuses primarily on money laundering and terrorism financing risk, technology, as well as cyber risks. MAS stated that stablecoins will be regulated in accordance with the current framework.
MAS also ensured that stablecoins would be backed by a single currency.
Ms. Ho Hern Shin, MAS’ Deputy Managing director, explained:
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. Innovation in financial services requires regulations.
Ms. Shin also explained that the enhanced regulatory regime on stablecoins aims at supporting the development of value-adding payments use cases for stablecoins.
The Deputy Managing director also stated that MAS would partner with industry players to explore potential benefits of tokenization, distributed ledger technology. According to the authority it will make necessary adjustments to the regulatory framework and address any associated risks.
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