Singapore Tightens Regulations on Cryptocurrency Services
New Measures to Limit Potential Consumer Harm
Singapore is set to introduce stricter rules for cryptocurrency service providers, according to the city-state’s financial authority. The move comes in response to feedback on its proposed regulations.
The Monetary Authority of Singapore (MAS) stated in a press release that the new measures will detail business conduct and consumer access measures aimed at limiting potential consumer harm. They will be implemented in phases, starting in mid-2024.
Stringent Business Conduct Measures
The measures imposed by MAS include prohibiting crypto service providers from accepting locally issued credit card payments. Additionally, they will be prohibited from offering incentives to trade in cryptocurrencies, providing financing, margin, or leverage transactions for retail customers.
The regulator will also issue rules pertaining to business conduct. This includes requiring crypto service providers to publish policies, procedures, and criteria governing the listing of a digital payment token, as well as establishing effective procedures to handle customer complaints and resolve disputes.
According to Ho Hern Shin, deputy managing director of financial supervision at MAS, “DPT service providers have the obligation to safeguard the interests of consumers who interact with their platforms and use their services.”
Consumer Caution and Vigilance
While these measures aim to protect consumers, MAS is clear that they cannot insulate customers from losses associated with the inherently speculative and highly risky nature of cryptocurrency trading. Ho urged consumers to remain vigilant and exercise utmost caution when dealing in digital payment token services, warning against unregulated entities, including those based overseas.
In a bid to develop a framework for regulating payment services and the provision of crypto services to the public, Singapore’s Payment Services Act first came into effect in January 2020. Since then, MAS has continued to step up supervision on crypto firms.
In a speech at the Singapore FinTech Festival 2023, MAS managing director Ravi Menon highlighted the shortcomings of cryptocurrencies as digital money. He stated that cryptocurrencies “have failed the test of digital money” due to their poor performance as a medium of exchange or store of value, as well as their susceptibility to speculative swings and the resulting losses faced by many investors.
As the world of cryptocurrency continues to evolve, Singapore is adapting its regulatory framework to ensure that consumer interests are safeguarded in the volatile world of digital payment tokens.
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