Singapore proposes regulation on cryptocurrency trading, Stablecoins
Singapore’s central bank has introduced proposals for new regulatory measures for cryptocurrency and stablecoin trading, aimed at reducing the risk of harm to consumers due to industry volatility.
Measures announced in two advisory articles on Wednesday include disallowing crypto-lending businesses owned by retail customers and to ensure customer assets are segregated from their own property.
Cryptocurrency businesses will also not be allowed to offer incentives to attract retail customers, nor accept credit card payments or provide financing to retail customers.
The Monetary Authority of Singapore (MAS) has said it discourages the public from speculative trading in cryptocurrencies and has introduced restrictions on the advertising of crypto services in public places.
“…Cryptocurrencies play a supporting role in the broader digital asset ecosystem and it would not be feasible to ban them,” MAS said in a media release, adding that proposed measures will help reduce the risk.
In addition to addressing money laundering, terrorist financing, technology and cyber risks, the MAS said it wants to ensure regulated stablecoins have a high degree of value stability.
In the case of single-currency-pegged stablecoins (SCS) where the value in circulation exceeds S$5 million ($3.53 million), issuers must hold reserve assets. cash, cash equivalents or short-term sovereign debt securities equivalent to at least 100% of the outstanding SCS par value. Assets must also be in the same currency as the currency being fixed.
All SCS issued in Singapore can only be pegged to the Singapore dollar or any Group of Ten (G10) currency, it said.
Banks in Singapore will be allowed to issue SCS and no further collateral requirements and reserve guarantees will be applied, the statement said.
Currently, there is only one stablecoin issued in Singapore.
The Asian financial hub initially attracted major crypto businesses like Binance, but some left the city-state earlier this year and moved to the United Arab Emirates, citing pretexts. strict regulations in Singapore.
It is unclear when the proposed measures might be introduced, but the public was invited to provide feedback on December 21.
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