Singapore Has Distanced Itself from Digital Assets?

The Monetary Authority of Singapores managing director chief Ravi Menon said on Monday during the Green Shoots Seminar that new measures are being considered to strengthen the protection of retail investors in digital assets. The measures would make it more difficult for retail investors to trade cryptocurrencies at a time when they appear to be “irrationally oblivious” to the risks of cryptocurrencies.

Menon said the new regulations could include customer suitability tests, as well as restrictions on the use of leverage and credit instruments by retail investors when trading these digital assets. He explained in detail the authority's plans to expand rules for the sector and said Singapore plans to hold a public consultation on the proposals by October.

Menon reiterated a position that the volatility of cryptocurrencies makes them unsuitable for use as currency and “highly dangerous” for retail investors. But he said tokenization and distributed ledgers that record ownership and transfer of ownership of digital assets offer economic potential.

The MAS had already begun tightening cryptocurrency investment rules earlier this year when it required virtual asset providers to obtain local licenses even if they only operated overseas. In recent weeks, the MAS has further tightened its scrutiny of the industry, sending a questionnaire to a number of applicants and holders of digital payment licenses to obtain detailed information about their business activities and holdings.

In summary, MAS being one of the earliest regulators on digital assets remains a supporter of digital asset innovation but due to the sake of maintaining cyber hygiene and technology-related risk as well as reducing consumer harm, it is sternly saying “no” to speculations.