The Monetary Authority of Singapore (MAS) published two consultation papers on Wednesday that proposed several regulatory measures for crypto service providers regarding consumer protection, including a risk awareness assessment for retail crypto traders.
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Fast facts
- The central bank is also considering options such as banning crypto firms from offering credit facilities, leverage or staking services to retail traders.
- The MAS pointed to the TerraUSD (UST) algorithmic stablecoin’s downward spiral in May to highlight the lack of risk awareness among retail traders purchasing digital assets.
- In the second consultation paper, MAS said it intends to regulate the issuance of single currency-pegged stablecoins with over S$5 million (US$3.5 million) worth in circulation.
- Singapore banks will be allowed to issue such stablecoins, the proposal said, and no additional reserve backing and prudential requirements will apply when the stablecoins are issued as tokenized forms of bank liabilities.
- “The enhanced regulatory regime for stablecoins aims to support the development of value-adding payment use cases for stablecoins in Singapore,” Ho Hern Shin, MAS Deputy Managing Director of Financial Supervision, said.
- MAS has invited comments on the proposals by Dec. 21.
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