- Banning retailer access to cryptocurrencies cannot outweigh citizens’ ability to circumvent them, according to MAS chief Ravi Menon
- The central bank is weighing measures to introduce a customer suitability test for trading digital assets, along with restrictions on leveraged trading.
The head of the Monetary Authority of Singapore (MAS), the body that oversees crypto regulations, has admitted that banning retail access to crypto assets is “not likely to work” given its borderless nature and ability to circumvent restrictions placed on it. they impose on him
in a open address on Sunday, MAS Managing Director Ravi Menon said that Singaporeans can gain access to numerous exchanges globally to trade digital assets, denying proposed restrictions meant to protect them from extreme periods of market volatility.
those limits, Ready by MAS Chairman Tharman Shanmugaratnam last month, include the introduction of customer suitability tests while restricting the use of leverage and credit facilities. MAS has repeatedly toyed with the idea of an outright ban on retail as a means of reducing risk, though it has yet to formally introduce those measures.
Leverage has often been blamed for causing the most financial damage to those participants who lack an expert understanding of how the market mechanism works.
“Adding friction to retail access to crypto is one area we are looking at,” Menon said in his speech.
But a blanket ban on retail access to cryptocurrencies would not be a viable strategy, the director added, indicating the need to work with other regulators globally to execute such a policy.
“With just a mobile phone, Singaporeans have access to any number of cryptocurrency exchanges in the world and can buy or sell any number of cryptocurrencies,” said Menon.
The director said confusion had arisen over the region’s stance towards the asset class, highlighting how observers hail it as a region for innovation and also see it as prohibitive.
Singapore Crypto Regulations: A Balancing Act
Singapore has continued its consistent focus on tightening its digital asset regulations in recent years, often citing consumer protection as its main motivating reason.
The region has often been touted as one of the first developed economies to introduce clearer guidelines for digital assets, back in 2016.
While the city-state’s regulations are meant to protect consumers from harm, it’s unclear how MAS intends to police retailer restrictions on those using a VPN, which can make an Internet user in Singapore presenting itself to exchanges as if it came from another jurisdiction. A MAS spokesman did not immediately respond to a request for comment.
The proposed restrictions on retail traders would be in addition to Singapore’s existing licensing regime for digital asset providers, which is intended to monitor and police how they offer cryptocurrencies to customers.
Earlier this year, Singapore closed a regulatory framework escape which had allowed domestically registered virtual asset service providers to offer their business abroad while evading supervision at home.
The central bank also issued guidance in January banning payment tokens from portraying crypto to the public in a way that minimizes the risks of trading the new asset class.
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