Singapore’s financial authority, the Monetary Authority of Singapore (MAS), has announced that it will implement tighter rules for cryptocurrency service providers. The decision follows feedback on the proposed regulations, and the measures aim to limit potential consumer harm and enhance business conduct in the cryptocurrency sector. The finalized measures will be rolled out in phases starting in mid-2024.
The new rules will prohibit cryptocurrency service providers in Singapore from accepting locally issued credit card payments, offering incentives for trading in cryptocurrencies, and providing financing, margin, or leverage transactions for retail customers. MAS will also issue rules related to business conduct, such as requiring crypto service providers to publish policies, procedures, and criteria governing the listing of digital payment tokens. Additionally, these providers must establish effective procedures for handling customer complaints and resolving disputes.
Ho Hern Shin, Deputy Managing Director of Financial Supervision at MAS, emphasized the obligation of digital payment token (DPT) service providers to safeguard the interests of consumers using their platforms. However, he noted that while business conduct and consumer access measures can enhance customer protection, they cannot eliminate the risks associated with the speculative and highly volatile nature of cryptocurrency trading.
The MAS has consistently warned the public about the high risks of cryptocurrency trading, emphasizing its unsuitability for the general public due to price volatility and speculative nature. Singapore’s Payment Services Act, which regulates payment services and the provision of crypto services to the public, came into effect in January 2020. The country has since increased supervision of crypto firms, with measures such as ordering firms to safeguard customer assets under a statutory trust.
In July, MAS prohibited crypto service providers from promoting their services in public areas or through third parties, limiting marketing to corporate websites, mobile applications, or official social media accounts. At the Singapore FinTech Festival 2023, MAS Managing Director Ravi Menon stated that cryptocurrencies have “failed the test of digital money” and highlighted their poor performance as a medium of exchange or store of value, citing sharp speculative swings and significant investor losses.