Singapore c.bank proposes measures on crypto trading, stablecoin
SINGAPORE, Oct 26 (Reuters) – Singapore’s central bank has proposed new regulatory measures for cryptocurrency and stablecoin trading, in a bid to reduce the risk of consumer harm from the industry’s volatility.
The measures published in two consultation papers on Wednesday include not allowing businesses to lend cryptocurrencies owned by private customers and ensuring customer funds are segregated from their own assets.
Businesses dealing in cryptocurrency will also not be allowed to offer incentives to attract retail customers, nor accept credit card payments or provide financing to retail customers.
The Monetary Authority of Singapore (MAS) has said it discourages the public from speculative trading in cryptocurrencies and has already imposed restrictions on advertising cryptocurrency services in public places.
“…Cryptocurrencies play a supporting role in the wider digital asset ecosystem and it would not be possible to ban them,” MAS said in a media release, adding that the proposed measures should help reduce risk.
Apart from addressing money laundering, terrorist financing, technology and cyber risks, MAS said it wanted to ensure that regulated stablecoins had a high degree of value stability.
In the case of stable coins pegged to a single currency (SCS) where the value in circulation exceeds S$5 million ($3.53 million), issuers must hold reserve funds in cash, cash equivalents or short-dated government debt securities equal to at least 100% of the face value of outstanding SCS in circulation. The assets must also be denominated in the same currency as the fixed currency.
All SCS issued in Singapore can only be pegged to the Singapore dollar or any Group of Ten (G10) currency, it said.
Banks in Singapore will be allowed to issue SCS and no additional reserve support and prudential requirements will apply, the statement said.
Currently, only one stablecoin has been issued in Singapore.
The Asian financial hub had initially attracted major crypto firms such as Binance, but some left the city-state earlier this year and moved to the United Arab Emirates, citing strict regulatory curbs in Singapore.
It is unclear when the proposed measures can be introduced, but the public is invited to give feedback by 21 December.
($1 = 1.4160 Singapore dollars)
Reporting by Chen Lin in Singapore Editing by Ed Davies
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