Singapore says crypto ban not feasible, proposes risk mitigation measures

Singapore, October 27 (ANI): Monetary Authority of Singapore, the Singaporean central bank has published papers proposing regulatory measures to reduce the risk of consumer harm from trading in cryptocurrencies.
While putting out the regulatory measures in the public domain, the Singaporean central bank said though trading in cryptocurrencies is "highly risky" and not suitable for the general public such digital assets play a supporting role in the broader digital asset ecosystem which is why it believes it would not be "feasible" to ban them.
Therefore, to reduce the risk to consumers from speculative trading in cryptocurrencies, it believes will require service providers of such digital assets to ensure proper "business conduct" and "adequate risk disclosure", an official statement from the central bank said on Wednesday.
The proposed measures cover three broad areas -
* Consumer Access - digital payment tokens service providers will be required to provide relevant risk disclosures to enable retail consumers to make informed decisions regarding cryptocurrency trading. They must also disallow the use of credit facilities and leverage by retail consumers for cryptocurrency trading.
* Business Conduct - digital payment tokens service providers will be required to implement proper segregation of customers' assets, mitigate any potential conflicts of interest which arise from the multiple roles they perform, and establish processes for complaints handling.

* Technology Risks - Similar to other financial institutions such as banks, digital payment tokens service providers will be required to maintain high availability and recoverability of their critical systems.
These proposed measures will be part of the Payment Services Act, it said.
It further cautioned people to still exercise utmost caution when trading in such digital assets and must take responsibility for such trading.
Regulations, it said, cannot protect consumers from losses arising from the inherently speculative and highly risky nature of digital trading.
Ho Hern Shin, Deputy Managing Director (Financial Supervision) at the central bank said these proposed measures mark the next milestone in enhancing Singapore's regulatory approach to foster an innovative and responsible digital asset ecosystem.
"Regulations go hand-in-hand with innovation in financial services. The enhanced regulatory regime for stablecoins aims to support the development of value-adding payment use cases for stablecoins in Singapore. As we continue to partner industry players to explore the potential benefits of tokenisation and distributed ledger technology, MAS will make appropriate adjustments to its regulatory regime to address the associated risks," Ho Hern Shin added. (ANI)