The Monetary Authority of Singapore has encouraged financial companies to discourage cryptocurrency trading.
Responding to a question in parliament on Aug. 1, 2022, concerning licensing of digital payment token providers, the minister in charge of the MAS said that the government agency had reached a consensus with international regulators that the sector needs greater oversight.
Tharman Shanmugaratnam added that the MAS would be consulting on its preliminary crypto framework in the coming months.
MAS ‘treading cautiously’
This stance echoes sentiments expressed by the MAS in Jan. 2022, when it discouraged speculation by retail investors on assets it deemed too volatile. It also closed down crypto ATMs.
On the recent collapse of the TerraUSD stablecoin and the current lending crisis that has seen many notable firms, including Celsius, Babel Finance, and Three Arrows Capital, capitulate, the minister said that the broader Singaporean economy is safe from any spillover into traditional markets. He noted that no critical institutions in the city-state have exposure to any distressed companies. Embattled hedge fund Three Arrows capital hails from Singapore and recently filed for bankruptcy. The CEO of Terraform Labs, the creator of the TerraUSD stablecoin, is reportedly living in Singapore and has been asked to notify South Korean authorities when he returns to the country.
Hard times for crypto in Singapore
In a report by the Financial Times, the chief fintech officer at the MAS vowed to take an unrelenting stance against bad behavior in the crypto industry.
Binance and Bybit recently exited Singapore in the face of progressively draconian measures imposed by the MAS.
Conversely, Crypto.com has received in-principle approval to operate in Singapore. It is also allowed to do business in Dubai.
The chief fintech officer at the MAS, Sopnendu Mohanty, said he expects a central-bank digital currency to be issued within three years. In the last week of June, the MAS co-launched a research center to work on the development of a CBDC as it seeks to pull customers away from crypto enterprises.