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Singapore to adopt stricter regulations for retail ‘crypto’ investors: MAS chief

The Monetary Authority of Singapore (MAS), Singapore’s de facto central bank and financial market regulator, has continued its campaign to introduce stricter digital asset regulations while encouraging blockchain-related innovation.

In opening remarks given at a local fintech festival tagged Green Shoots Seminar, MAS Managing Director Ravi Menon stated that the regulator is committed to discouraging digital assets speculation, which he described as “the source of the crypto world’s problems.”

Menon noted that despite the MAS’s several warnings to investors against digital assets, surveys still show that many retail investors seem “irrationally oblivious about the risks of cryptocurrency trading.” Hence, the body is considering additional measures to drive the point home, as banning the asset class is not working.

“Adding frictions on retail access to cryptocurrencies is an area we are contemplating. These may include customer suitability tests and restricting the use of leverage and credit facilities for cryptocurrency trading,” he said.

This is only one of the five areas of digital assets risks that the MAS is focusing on. According to Menon, the regulator is also working on regulations that will combat money laundering and terrorist financing risks; manage technology and cyber-related risks; uphold the promise of stability in stablecoins, and lessen the potential financial stability risks.

Singapore still gunning to become a global digital asset and blockchain hub

Despite his strong opposition to the speculative nature of digital assets, the MAS chief does not write off the entire ecosystem. He expects Singapore to still become “one of the most conducive and facilitative jurisdictions for digital assets.”

This can be achieved when regulations and innovation go hand in hand. On the innovation aspect, he said Singapore is actively exploring and encouraging the adoption of underlying blockchain innovations like distributed ledgers, smart contracts, and tokenization across a wide range of applications, as well as exploring a central bank digital currency (CBDC).

Notably, this is not the first time the MAS has expressed its stance on digital asset speculation. In responses to parliamentary inquiries on its digital asset approach, the MAS has often stated that it is actively working to make the country’s digital assets regulations stricter both for investors and businesses

A Reuters report notes that the recent market crash that saw the collapse of several Singapore-based digital assets firms such as Three Arrows Capital could also be contributing to the MAS’s concerns about the industry.

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