The Monetary Authority of Singapore (MAS), Singapore’s central bank and financial regulator, has stated that it is considering introducing stricter digital assets regulations to protect consumers better.
The MAS stated this in response to a question filed by Murali Pillai, a member of parliament representing the Bukit Batok Single Member Constituency (SMC), asking the prime minister what the central bank’s plans were for regulating “risky” digital assets trading platforms.
In the MAS’s written response, Senior Minister and Minister in charge of the MAS, Tharman Shanmugaratnam, stated the regulator has been on the digital currency regulations beat since 2017 and will continue to do so, because of the recent events in the market.
Shanmugaratnam noted that the new restrictions the MAS is considering introducing include limiting retail participation in digital assets trading and rules on the use of leverage when transacting via digital currencies.
“MAS has been carefully considering the introduction of additional consumer protection safeguards. These may include placing limits on retail participation, and rules on the use of leverage when transacting in cryptocurrencies,” he said.
Shanmugaratnam stated that the MAS could introduce these regulations thanks to powers given to it by the Payment Services Act (PS Act). This law places all Digital Payments Tokens (DPT) service providers to be under the MAS’s purview but has only been used to make AML/CTF regulations before now.
The MAS is also collaborating with international standard-setting bodies to ensure that these rules are most effective given the cross-border nature of the digital assets market.
The senior minister further highlighted MAS’s other digital currency regulation moves. These include the ban on marketing and advertising of digital assets in ways that trivialize their risk. The regulation introduced early this year has effectively banned digital asset advertising in public spaces and digital currency ATMs.
MAS closing the net on illicit behavior among digital assets firms
The MAS’s resolve to better protect digital assets consumers is coming amidst the collapse of major Singapore-based digital assets firms. The Singapore-incorporated Terra went down with billions of investors’ funds. More recently, liquidity issues came to light in Three Arrows Capital (3AC) which is also Singapore-based.
In a recent statement, the MAS’s Chief Fintech Officer Sopnendu Mohanty voiced that the regulator is determined to be “unrelentingly hard” on bad actors in the digital assets space.
The MAS, in keeping with the resolution, has opened investigations into 3AC. According to Bloomberg, the firm has been reprimanded on allegations of breaching information reporting regulations.
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