Singapore may soon require retail investors to take a test before trading crypto, bans credit cards • TechCrunch

Singapore may soon require retail investors to take a test and not use credit card payments and other forms of borrowing to trade cryptocurrencies, the central bank suggested on Wednesday in a series of tough measures as the island nation looks to sensitize citizens to the risks surrounding the risks. volatile assets.

The Monetary Authority of Singapore said in a set of consultation documents that it is concerned that many retail customers may “not have sufficient knowledge of the risks involved in trading” digital payment tokens, which could lead them to “take on higher risks than they would otherwise have done. been willing or able to bear.”

Several popular crypto exchanges already require customers to periodically review questionnaires before they are allowed to trade crypto and engage in derivatives trading. The central bank acknowledged [PDF] that a number of industry players support some form of assessment of the private customer’s knowledge of risk.

The new guidelines, which are open for public consultation until the second half of December, also suggest that crypto service providers should not use incentives such as giving away free tokens or other gifts to retail customers. It also proposes to ban celebrity endorsements.

The central bank has also suggested that stablecoin issuers make adequate disclosures about their tokens and hold reserve funds in cash, cash equivalents or debt securities that “in the aggregate correspond to 100% of the face value of outstanding” tokens in circulation “at all times.”

The debt securities, it says in the proposal, must be issued by the central bank in the fixed currency or organizations that are both of a national and international nature with a credit rating of at least AA—.

“SCS [single-currency pegged stablecoins] issuers must obtain independent attestation, for example from external audit firms, that the reserve funds meet the above requirements on a monthly basis. This attestation, including the percentage value of the reserve funds in excess of the face value of outstanding SCS in circulation, must be published on the issuer’s website and submitted to MAS by the end of the following month (for the month being attested),” the proposal says [PDF]and adds that issuers must also appoint an external auditor to carry out an annual audit of their reserve funds and send the report to MAS.

The proposal marks a major shift in Singapore’s stance on crypto. Once a favored global crypto hub for its policies, Singapore authorities have sharpened their view of digital assets following the collapse of a number of firms, including Terraform Labs’ stablecoin UST and native token LUNA, and hedge fund Three Arrows Capital.

(More to follow)