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Recent reports reveal that Singapore is considering tightening its digital asset regulations to discourage cryptocurrency speculation. The new rules aim to prevent individuals from borrowing money for cryptocurrency trading and companies from rewarding retail traders.
Singapore’s financial regulator announced these changes will extend to all investors within its jurisdiction.
MAS Expands Crypto Regulation
The Monetary Authority of Singapore (MAS) has initiated additional measures to protect retail investors from the risks associated with crypto trading. By preventing retail traders from participating in speculative digital currency activities, the financial regulator hopes to reduce the impact of rug pulls and other scams that have become reoccurring.
The regulator will gradually implement the proposed measures beginning in mid-2024. As part of Singapore’s ongoing attempts to ensure a safe trading space, the regulator had previously introduced measures to restrict retail participation in trading activities.
It introduced a ban on lending and staking of virtual tokens. The MAS will also prohibit service providers from accepting local credit cards under the proposed rules.
In addition, the proposed rules will restrict referral incentives, learn-and-earn programs, and similar promotions. Accordingly, the MAS has released two consultation papers that recommend regulatory measures to reduce the risk of consumer danger from crypto trading and to encourage the development of stablecoins as a reliable medium of exchange in the digital asset ecosystem.
More importantly, the new proposals are intended to protect retail investors from cryptocurrency trading risks and ensure a safer cryptocurrency market.
The MAS also issued guidelines to ensure that Digital Payment tokens (DPT) service providers do not promote their products to the public in Singapore. The regulator will gradually introduce these measures in June 2024 to ensure a smooth transition for all stakeholders.
Protecting Users Against Unregulated Platforms
Singapore issued the guidelines following feedback on the MAS’s initial digital payment token services proposals in October 2022. Similar to the requirements imposed on traditional banks, the regulatory framework will require crypto firms to maintain high responsiveness to customers’ concerns.
The MAS’s efforts to regulate digital payment token services are part of a broader plan to position Singapore as a leading global financial hub. In addition, Singapore’s apex bank intends to promote consumer protection, market integrity, and innovation in the crypto market.
Furthermore, the regulator expects these firms to develop processes for handling customer complaints and resolving conflicts, ensuring enhanced consumer safety. It is important to note that, even with these proposed measures, the MAS said that digital asset trading is inherently “speculative and high-risk,” and customers should proceed with caution.
Thus, the MAS advises Singaporeans to avoid dealing with “unregulated entities,” including those based abroad.
Global Crypto Market Actions
Bitcoin (BTC) has continued to dominate the thriving crypto space, with a market cap of $732 billion. This accounts for approximately 49.46% of total cryptocurrency market capitalization. Bitcoin, the world’s leading asset, is buzzing with activity, exchanging hands at $37,700 at the time of writing, displaying a 1.3% surge over the last 24 hours and 3.2% over the previous seven days.
Bitcoin’s meteoric rise and commanding position in the market reflect its symbol as a store of value and resilience in the face of high volatility in the market. Hence, the asset’s price movement echoes the sentiments of a global community of stakeholders and macroeconomic trends.
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