Singapore will introduce tighter rules for cryptocurrency service providers, following feedback on its proposed regulations, said the city-state’s financial authority.
“The consulted proposals detail business conduct and consumer access measures to limit potential consumer harm,” the Monetary Authority of Singapore said in a statement on Thursday.
The measures will include barring crypto service providers in Singapore from accepting locally issued credit card payments, offering incentives to trade in cryptocurrencies and providing financing, margin or leverage transactions for retail customers. The finalized measures will take effect in phases starting in mid-2024, said MAS.
The regulator will also issue rules pertaining to business conduct, such as requiring crypto service providers to publish policies, procedures and criteria that govern the listing of a digital payment token and establish effective procedures to handle customer complaints and resolve disputes.
“DPT service providers have the obligation to safeguard the interests of consumers who interact with their platforms and use their services,” said Ho Hern Shin, deputy managing director of financial supervision at MAS.
“While these business conduct and consumer access measures can help meet this objective, they cannot insulate customers from losses associated with the inherently speculative and highly risky nature of cryptocurrency trading,” said Ho.
“We urge consumers to remain vigilant and exercise utmost caution when dealing in digital payment token services, and to not deal with unregulated entities, including those based overseas.”
MAS has repeatedly warned that trading crypto is highly risky and not suitable for the general public, as crypto prices are subject to volatility and speculation.
Singapore’s Payment Services Act — a framework for regulating payment services and the provision of crypto services to the public — first came into effect in January 2020.
Singapore has since stepped up supervision on crypto firms. In July, it ordered firms to safekeep customer assets under a statutory trust before the end of the year. MAS also restricts firms from facilitating lending or staking of their retail customers’ assets.
In January 2022, Singapore banned crypto service providers from promoting their services in public areas or through third parties such as social media influencers. Crypto service providers can only market or advertise on their own corporate websites, mobile applications or official social media accounts.
At the Singapore FinTech Festival 2023 last week, MAS managing director Ravi Menon said that cryptocurrencies “have failed the test of digital money.”
“They have performed poorly as a medium of exchange or store of value. The prices are subject to sharp speculative swings. Many investors in these cryptocurrencies have suffered significant losses,” said Menon.