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The Monetary Authority of Singapore (MAS) has proposed revised guidelines to curb the growth of digital asset speculation in the retail market. In a recent publication, the central bank issued amended regulations for market activities related to digital payment token service providers and associated cryptocurrency entities, particularly in reducing price speculation. According to the document, companies will not be allowed to offer trading incentives to customers, as authorities have been concerned for months that some users are being lured into speculation, potentially resulting in losses. Iconic incentive measures under the proposed guidelines include offering leverage and profits, which now face the risk of being banned to some extent. These regulations come as the government plans to tighten the prevalence of fraudulent activities and reduce risks in the retail market. In recent years, global regulators have been working to make local markets safer for investors, especially after the collapse of cryptocurrency companies led to market losses of billions of dollars. Financial restrictions and broader retail regulations are also suggested by the financial regulatory authority. The regulator proposes cutting off credit limits for purchasing certain assets, as companies will be prohibited from accepting purchases with any locally issued credit cards. Additionally, in the new guidelines, rewards and referral programs for learning how to make money will also be restricted for new customers. The new laws will apply to all retail investors, both accredited and non-accredited users. Geographically, the guidelines extend to retail traders outside of city-states. These rules will take effect in mid-2024, following a year-long public consultation, with the aim of appropriately regulating digital payment token service providers. In addition to the global crisis left by Terra and FTX last year, Singaporean investors have also been exposed to Three Arrows Capital, whose collapse led to a new round of regulatory scrutiny in the market. Ho Hern Shin, Deputy Managing Director for Financial Supervision at the Monetary Authority of Singapore, noted that even with the proposed rules, it is challenging to prevent users from becoming victims of highly speculative and risky digital assets. "We urge consumers to exercise caution and be extra vigilant when dealing with DPT services and not to deal with unregulated entities, including those based overseas." Singapore is known as a major cryptocurrency hub in Asia, attracting several companies into the country, with many seeking licenses to offer digital asset-related services. The country, along with other jurisdictions, has released stablecoin regulations, viewing them as an essential tool for digital currencies alongside central bank digital currencies (CBDCs) and noting that private cryptocurrencies fall below standards. "They perform poorly as a medium of exchange or store of value, with prices subject to drastic speculative fluctuations, causing significant losses for many cryptocurrency investors." |
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Post time 29-11-2023 07:48:26