It was once the go-to destination for crypto firms after China pulled the plug in 2017. But now as retail interest increases, Singapore is having to re-think its attitudes towards cryptocurrencies.
The Monetary Authority of Singapore (MAS) is stepping in to provide oversight and guidelines for the public.
“MAS has consistently warned the public that investing in cryptocurrencies is highly risky as investment products and not suitable for the general public. Singapore is not alone in holding this view — some jurisdictions have also taken measures in relation to advertising by crypto firms,” a spokesman told Forkast.
The MAS issued guidelines in January limiting the promotion of cryptocurrency trading services to the public.
MAS Assistant Managing Director (Policy, Payments, and Financial Crime) Loo Siew Yee said then, “MAS strongly encourages the development of blockchain technology and innovative application of crypto tokens in value-adding use cases. But the trading of cryptocurrencies is highly risky and not suitable for the general public.”
MAS also issued prohibitions regarding digital payment tokens (DPT) and ordered them not to “portray the trading of DPTs in a manner that trivializes the high risks of trading in DPTs, nor engage in marketing activities that target the general public.”
In the same month, cryptocurrency automated teller machines (ATMs) operators in Singapore began shutting their ATMs following a ban.
Singapore’s largest operator of crypto ATMs, Daenerys & Co, was forced to close its network of five machines. Daenerys said that the speed with which the machines were shut down came as an “unexpected surprise.”
Singapore distinguishing between retail and institutional activity
In a separate interview, Yale-NUS College associate professor Andrew M. Bailey said Singapore appears to be “increasingly distinguishing between retail activity and institutional activity, and they are far more friendly to the second than the first.”
“So until that is settled, there are a number of policy agendas that I think remain somewhat ambiguous. And so what regulators are doing now is taking a somewhat cautious and conservative route, waiting for further direction,” he added.
But Bailey noted that Singapore’s regulators are more accommodating towards institutional investors.
Last week it was reported that Singapore’s neighbor, Malaysia, was positioning itself as the next cryptocurrency hub.
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