Singapore’s MAS Mulls to Bring Retail Crypto Trading Restrictions

Singapore is considering bringing more restrictions on retail cryptocurrency trading as the market is witnessing a plunge in value and the crumbling of several companies.

“MAS has been carefully considering the introduction of additional consumer protection safeguards,” wrote the Chairman of the Monetary Authority of Singapore (MAS), Tharman Shanmugaratnam in a response to a question by the city-state’s parliament.

Additionally, he mentioned that the upcoming rules might include placing limits on retail participation and limits on the use of leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term in cryptocurrency trading.

“Given the borderless nature of cryptocurrency markets, however, there is a need for regulatory coordination and cooperation globally. These issues are being discussed at various international standard-setting bodies where MAS actively participates,” Shanmugaratnam added.

Center to the Latest Market Turmoil

Singapore is the base of several cryptocurrency startups. However, several major collapses due to the ongoing market slump occurred to companies based in the city-state.

Terraform Labs, which rattled the crypto industry with the collapse of its USD-pegged algorithmic stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term, is based in Singapore. In addition, it is the home to Three Arrows Capital, the crypto hedge fund that is now facing liquidation. Most recently, Vauld, another Singapore-based crypto lending and trading platform, suspended withdrawals and other services and is now considering restructuring.

However, Singapore’s authority was always cautious with the growing cryptocurrency market. MAS has been issuing warnings against the volatile market since 2017, stating “cryptocurrencies are not suitable investments for the retail public.”

Further, the regulator imposed heavy curbs on crypto promotions within its jurisdiction last January. It restricted the marketing and advertising of cryptocurrency services in public areas, which prompted several companies to take down ads from public transport venues and remove crypto ATMs.

Crypto startups, to operate from Singapore, need to obtain a license from the MAS. The process is considered to be rigorous as only 14 firms have been granted permission to operate locally so far, out of around 200 applicants.