By Richard Hines
The Monetary Authority of Singapore (MAS) has introduced measures to regulate its cryptocurrency sector. Two consultation papers were issued on the bases of regulating the operations of Digital Token Service Providers and stablecoin transactions.
Users Knowledge Of Coins To Be Tested Before Issuing
The major aim of these proposals by the MAS is to bring about a reduction in the risks involved for consumers trading in crypto and to regulate stablecoin related transactions. This comes after the Singaporean hedge fund Three arrows capital collapsed a few months ago.
The first proposal document read that Digital Token Service Providers offering credit services to its customers in any form of fiat currency or cryptocurrencies, should henceforth be banned. This proposal focuses on digital payment tokens related to major cryptocurrencies services
MAS also proposed that consumers should go through tests, so as to know the level of their knowledge when it comes to the risk involved in crypto. Digital assets providers are expected to make information available to consumers that fail in order to give them essential knowledge on the crypto risks.
The regulator opined that restrictions should be placed on lending and staking single-currency pegged stable coins (SCS) by stablecoin issuers. This extends to lending and trading of other cryptocurrencies. The rule is also applicable to anyone referring a service provider to a retail consumer
Another proposal introduces regulations on the rate of annual operating expenses. The capital should not exceed $1 million or 50% of the expenses of the single-currency pegged stable coins issuer.
Singapore Gears Up Crypto Regulation Laws
Different measures to reduce the risk associated with crypto currencies have been put in place this year by the Singapore regulator. Earlier this year, a ban was placed on the advertisement of any crypto services in any way aside from the issuers websites and social media accounts.
All of these have not stopped investors in Singapore from putting a larger part of their investment in crypto despite various regulations.
The regulator did not announce when the latest proposal would be implemented but gave room for interested parties to submit their comments on the proposal by 21st of December 2022.