Singapore may soon require retail investors to pass crypto trade test, ban credit cards • TechCrunch

Singapore may soon require retail investors to pass a test and not use credit card payments and other forms of borrowing to trade cryptocurrencies, the central bank suggested on Wednesday in a series of tough measures as the island nation seeks to educate citizens about the risks associated with volatile assets.

The Monetary Authority of Singapore said in a series of consultation papers that it is concerned that many retail customers may “lack sufficient knowledge of the risks of trading” in digital payment tokens, which could lead them to “take on higher risks than they would otherwise otherwise. were ready or able to endure.”

The central bank has also proposed that crypto firms licensed under the country’s Payment Services Act should not be allowed to provide loans to retail investors, potentially putting many firms out of business. While “this latter option is more stringent than the regulatory treatment of retail customer securities under SFA38”, the central bank acknowledged, “MAS believes that the increased risk of harm to consumers in this unregulated space may require stricter measures for retail customers. .”

Several popular crypto exchanges already require their customers to review questionnaires periodically before they are allowed to trade crypto and engage in derivatives trading. Central Bank admitted [PDF] that a number of industry participants support some form of assessment of retail customers’ risk knowledge.

The new guidelines, which are open for public comment until the second half of December, also suggest that crypto service providers do not use incentives such as giving away free tokens or other gifts to retail customers. He also proposes to ban celebrity endorsements.

The central bank also suggested that stablecoin issuers adequately disclose information about their tokens and hold reserve assets in cash, cash equivalents or debt securities that are “in aggregate equivalent to 100% of the outstanding face value” of the tokens. times”.

The debt securities, the proposal says, must be issued by the central bank of the pegged currency or entities that are both governmental and international with a credit rating of at least AA—.

“SKS [single-currency pegged stablecoins] issuers must obtain independent attestation, for example by external auditing companies, that reserve assets meet the above requirements on a monthly basis. This attestation, including the interest value of the reserve assets in excess of the face value of outstanding SCSs in circulation, must be published on the issuer’s website and submitted to MAS by the end of the following month (for the month being attested).” proposal says [PDF]adding that issuers must also appoint an external auditor to conduct an annual audit of their reserve assets and submit a report to MAS.

The proposal marks a major shift in Singapore’s stance on crypto. Authorities in Singapore, once a preferred global crypto hub because of its policies, have tightened their sights on digital assets following the collapse of a number of firms, including UST Terraform Labs’ stablecoin and native token LUNA, and hedge fund Three Arrows Capital.

“The collapse of a number of cryptocurrency trading platforms, where some of them were betting or lending, resulted in significant harm to consumers,” the central bank said.

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