The Monetary Authority of Singapore (MAS) has received significant feedback on its proposal for digital currency and stablecoin regulation. Chairman Shanmugaratnam said that MAS is reviewing the feedback received and will publish its response to the consultation feedback by mid-2023. The central bank's proposals received diverse reactions from industry CEOs of virtual asset service providers and academics, which prompted lawmakers to quiz Shanmugaratnam on when a proper disclosure would be made. Part of the proposals in MAS' paper was an outright ban on the offer of leverage and credit by virtual currency service providers by retail traders. The proposal included internal mechanisms to ensure a clear separation of clients' funds from the firm's proprietary funds.
Under the proposals, firms would be required to "maintain high availability and recoverability of their critical systems" while reducing instances of conflicts of interest to the barest minimum. However, MAS stated that regulations cannot protect consumers from losses arising from the highly risky and speculative nature of DPT trading, and consumers must exercise caution and take responsibility for such trading.The proposed regulations aim to safeguard consumers' interests by ensuring that digital payment tokens (DPTs) service providers maintain a high level of security and transparency. The proposed regulations also aim to reduce the risk of financial crimes, including money laundering and terrorist financing, associated with DPT trading.
Singapore's proposed regulations aim to maintain the country's reputation as a leading financial hub while also promoting innovation in the fintech sector. The proposed regulations aim to strike a balance between innovation and risk management. The regulations aim to ensure that digital currencies and stablecoins are used responsibly while promoting their use in the digital economy.
The regulations come as digital currencies and stablecoins are gaining mainstream acceptance and adoption. As more investors and companies look to invest in digital currencies and stablecoins, regulators worldwide are introducing regulations to ensure that the market operates in a safe and secure manner. Singapore's proposed regulations aim to align the country's regulatory framework with the best practices in the industry, ensuring that investors are protected from the risks associated with DPT trading.
Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.