Singapore may soon require retail investors to take test before trading crypto, prohibit credit cards • TechCrunch
Singapore may soon require retail investors to test and not use credit card payments and other forms of borrowing for cryptocurrency trading, the central bank suggested Wednesday in a series of tough measures as the island nation looks to educate citizens about the risks surrounding volatile assets.
The Monetary Authority of Singapore said in a set of advisory papers that it is concerned that many retail customers may “not have sufficient knowledge of the risks of trading” digital payment tokens, which could lead them “to take on higher risks than they would otherwise face.” were willing or able to bear it.”
The central bank has also suggested that crypto firms licensed under the country’s Payment Services Act should not be allowed to lend to retail investors in a move that could topple many companies.
While “this latter option is more stringent than the regulatory treatment of securities for retail clients under SFA38,” the central bank acknowledged, “MAS is of the view that the increased risk of consumer harm in this unregulated space may require stricter measures for retail clients.”
Many popular cryptocurrency exchanges require their clients to check surveys periodically before allowing them to trade cryptocurrencies and engage in derivatives trading. central bank He confessed [PDF] That a number of industry players support some form of assessment on retail clients’ knowledge of the risks, but said they should also disclose whenever they have a financial interest in the tokens they offer clients.
The new guidelines, which are open for public consultation until December 21, suggest that crypto providers should not use incentives such as giving free codes or other gifts to retail customers in court. She also suggested banning celebrity endorsements.
The central bank also suggested that issuers of stablecoins adequately disclose their tokens and hold reserve assets in cash, cash equivalents, or debt securities “equivalent to at least 100% of the face value of the “tokens in circulation” at all times.”
The proposal says that debt securities should be issued by the central bank of the pegged currency or organizations of a governmental and international character with a credit rating of at least AA—.
“SCS [single-currency pegged stablecoins] Issuers must obtain independent certification, such as external audit firms, that reserve assets meet the above requirements on a monthly basis. This certificate, including the percentage of the value of the reserve assets in excess of the face value of the existing SCS in circulation, must be published on the website of the issuer and submitted to the MAS by the end of the following month (for the month in which it is certified), “Proposal or Offer” Says [PDF]adding that issuers should also appoint an external auditor to conduct an annual review of their reserve assets and report to MAS.
The proposal represents a major shift in Singapore’s stance on cryptocurrency. Once it became a preferred global center for cryptocurrency for its policies, the Singapore authorities hardened their views on digital assets after the collapse of a series of companies including UST Terraform Labs Stablecoin The original symbol is LUNA and Hedge Fund Three Arrows Capital.
“The collapse of a number of cryptocurrency exchanges, with a few of them conducting hostage or lending activities, has caused great harm to consumers,” the central bank said.