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Singapore mulls new crypto rules, wants to ban retail traders from incentives and credit cards

source-logo  crypto.news 23 November 2023 12:05, UTC

The Monetary Authority of Singapore is seeking new limitations to harden crypto speculation.

Singapore’s financial watchdog, the Monetary Authority of Singapore, is set to impose new rules on retail crypto investors in a bid to safeguard customers from highly speculative assets.

In a statement published on Thursday, Nov. 23, MAS proposed new regulatory measures aimed at restricting crypto businesses from offering incentives to retail customers, saying incentives such as free tokens upon signup “may unduly impair the judgment of retail customers” to use crypto services.

The regulator admitted that the majority of respondents to its consultation paper on the new rules disagreed with the restriction. MSA in turn said that such inventives may lure people into trading tokens “without fully considering the risks involved.”

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As such, businesses won’t be allowed to offer incentives or margin/leverage transactions for their customers, MAS also ruled. Moreover, the financial regulator of Singapore also prohibited crypto businesses from accepting locally issued credit cards, arguing that credit cards would allow retail customers “easy access to debt financing.” The new regulatory framework is expected to be gradually phased in from mid-2024.

Singapore’s latest efforts at regulating crypto trading come shortly after MAS unveiled new rules aimed at issuers of stablecoins linked to the Singapore dollar or any G10 currencies. That framework encompasses requirements related to stablecoin stability, capital, redemption at par, and disclosure of audit results to customers.

The regulator also emphasized that only stablecoin issuers meeting all the specified criteria can apply for the designation as “MAS-regulated stablecoins.”

Read more: Paxos to issue USD stablecoin in Singapore