Singapore wants to tighten current crypto regulations

The Monetary Authority of Singapore (MAS) is considering tightening restrictions to prevent retail investors from trading cryptocurrency.

MAS’ director, Ravi Menon, said in a speech that any new regulations would likely be tested first to determine customer suitability while commenting that most investors are 'irrationally oblivious' to the risks surrounding cryptocurrency trading. 

He also said that 'adding frictions' on retail access to cryptocurrencies was a step the MAS could take. 

'Banning retail access to cryptocurrencies is not likely to work. The cryptocurrency world is borderless,' Menon said. 'There is greater impetus now among global regulators to enhance regulations in this space. MAS will also do so.'

The MAS is also planning a public consultation on regulating stablecoins in October. This move was spurred by the Terra stablecoin crash, which cost several billions of dollars in losses and still has the crypto market reeling from its impact.

Singapore is also encouraged to enforce stricter crypto regulations after what has happened to several Singapore-related crypto companies in the past few months. One of these is Three Arrows Capital, a cryptocurrency hedge fund ordered to liquidate in June by a court in the British Virgin Islands.

Menon believes that crypto’s volatility makes them a lousy replacement for money and 'highly hazardous' for retail investors. On the other hand, he also believes blockchain technology, like tokenisation and distributed ledgers, offers transformative economic potential and should be focused on.

Singapore was one of the early adopters of crypto, with a vision of establishing itself as a global crypto hub. Currently, the city-state is trying to strike a balance between advancing its knowledge of blockchain technology and protecting retail investors from market volatility.

So far, the city-state has been strict with licencing potential digital service token providers – just 10 out of 200 applicants have been granted permits to operate. Menon said the MAS prioritises those who demonstrate 'strong risk management capabilities.'

Photo: Euro Money