Singapore Tightens Rules for Cryptocurrency Service Providers
Introducing Tighter Rules
In a move to address consumer protection and limiting potential consumer harm, Singapore is set to introduce tighter rules for cryptocurrency service providers. The city-state’s financial authority, the Monetary Authority of Singapore (MAS), recently announced this following feedback on its proposed regulations.
The measures will include various restrictions such as barring crypto service providers in Singapore from accepting locally issued credit card payments, offering incentives to trade in cryptocurrencies, and providing financing, margin, or leverage transactions for retail customers. The finalized measures will take effect in phases, starting in mid-2024.
As part of these new rules, MAS will also issue regulations pertaining to business conduct, such as requiring crypto service providers to publish policies, procedures, and criteria that govern the listing of a digital payment token. Additionally, they must establish effective procedures to handle customer complaints and resolve disputes.
MAS’ deputy managing director of financial supervision, Ho Hern Shin, emphasized the obligation of digital payment token (DPT) service providers to safeguard the interests of consumers. While the business conduct and consumer access measures aim to meet this objective, consumers are still urged to remain vigilant, as Ho highlighted the inherently speculative and highly risky nature of cryptocurrency trading.
Supervision and Warnings
MAS has repeatedly warned that trading crypto is highly risky and not suitable for the general public, given the volatility and speculation around crypto prices. Singapore’s Payment Services Act, which regulates payment services and the provision of crypto services to the public, first came into effect in January 2020, showing the government’s long-standing commitment to regulating the cryptocurrency space.
In recent years, Singapore has stepped up supervision on crypto firms, including measures to safekeep customer assets and restrictions on facilitating lending or staking of retail customers’ assets.
At the Singapore FinTech Festival 2023, MAS managing director Ravi Menon emphasized the poor performance of cryptocurrencies as digital money, citing their failure as a medium of exchange or store of value. He also highlighted the significant losses that many investors in cryptocurrencies have suffered due to sharp speculative swings.
With the finalized measures set to take effect gradually from mid-2024, Singapore is continuing its efforts to regulate the cryptocurrency space and protect consumers from potential risks associated with digital payment token services.
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