The Monetary Authority of Singapore’s Managing Director, Ravi Menon, confirmed in a speech on Monday that the regulator is considering bringing customer suitability tests for crypto trading and banning the use of leverage and credit facilities for retail traders.
“But banning retail access to cryptocurrencies is not likely to work,” Menon said in the event attended by more than 50 industry representatives. “The cryptocurrency world is borderless.”
He further pointed out the “irrationally oblivious” nature of consumers towards the risks of cryptocurrencies. Traders continue to trade cryptocurrencies despite multiple warnings.
“Adding frictions on retail access to cryptocurrencies is an area we are contemplating,” Menon added. On top of that, he stressed: “Yes to digital asset innovation, No to cryptocurrency speculation.”
Menon's speech came months after the regulator’s official confirmation of bringing new cryptocurrency trading restrictions. MAS even seeks granular information on business activities from cryptocurrency startups operating in the city-state.
The Asian Crypto Hub
Singapore became an attractive base for crypto companies after their exodus from China. Now, the Southeast Asian country has mandated licensing of all crypto companies. However, it approved only 14 companies, while almost 200 remain on the waitlist.
Meanwhile, Singapore remained in the limelight in the recent fallout of the crypto industry. Several high-flying yet failed crypto platforms are based in the small Asian financial hub.
Moreover, Menon highlighted the conundrum of stablecoins and proposed a consultation for a regulatory approach by October.
“Many stablecoins lack the ability to uphold the promise of stability in their value. Some of the assets backing these stablecoins – such as commercial papers – are exposed to credit, market, and liquidity risks,” he said.
“There are currently no international standards on the quality of reserve assets backing stablecoins. Globally, regulators are looking to impose requirements such as secure reserve backing and timely redemption at par.”
