Responding to the feedback on its proposed Digital Payment Token (DPT) regulations, the Monetary Authority of Singapore (MAS) has introduced measures for DPT service providers aimed at curbing speculative activities in cryptocurrency investments.
As Singapore’s primary financial regulatory authority, MAS has outlined five strategies for DPT service providers to assist retail customers in steering clear of speculative behavior in cryptocurrency. These service providers are required to assess the risk awareness of their customers prior to offering cryptocurrency-related services. Furthermore, they are advised against encouraging trading in cryptocurrencies through incentives. Additionally, they are prohibited from offering services that involve financing, margins, or leveraged cryptocurrency transactions.
Another strategy by MAS to reduce speculative investment in cryptocurrencies is the prohibition of payments through locally issued credit cards. Moreover, cryptocurrency holdings will not be factored into the calculation of a customer’s net worth. Ho Hern Shin, the deputy managing director (financial supervision) of MAS, commented on these measures, stating:
“These measures in business conduct and consumer access are designed to achieve this goal, but they cannot fully protect customers from the losses that come with the speculative and high-risk nature of cryptocurrency trading.” The MAS highlights the “significant risks and consumer harms” associated with speculative cryptocurrency trading, often driven by unverified success narratives, celebrity endorsements, and the fear of missing out on lucrative returns. On Nov. 15, Singapore’s central bank expanded Project Guardian by adding five more industry pilots to explore various applications of asset tokenization. MAS elaborated:
“These initiatives under Project Guardian are set to propel the institutional acceptance of digital assets, aiming to enhance liquidity, open up new investment avenues, and improve the efficiency of financial markets.” Among the 17 financial institutions participating in Project Guardian, the five new pilot projects involve Citi, T. Rowe Price, Fidelity International, Ant Group, BNY Mellon, OCBC, JPMorgan Apollo, and Franklin Templeton.
In conjunction with these pilots, MAS has also initiated Global Layer One, a project aimed at developing an open digital infrastructure to support tokenized financial assets and applications.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up