Singapore is about to be stricter with the crypto industry
A series of new proposals from the Central Bank of Singapore mark a 'time-changing' turning point for the cryptocurrency industry in the country once considered a global 'blockchain hub'.
Listen to this article
The Central Bank of Singapore said it was concerned that many investors “have not had sufficient knowledge of the risks involved in trading” cryptocurrencies, which could lead to a high level of “risk tolerance”. more than they can bear.”
FoxCryptoNews summarizes some of the new proposals put forward by the Central Bank of Singapore as follows:
- Cryptocurrency companies in Singapore are not allowed to lend to retail investors;
- Exchanges must have forms to assess the risk level of investors before allowing transactions, along with revealing the true financial benefits of tokens that the exchange offers to investors. ;
- Crypto service providers must not encourage users to trade through free token vouchers or other types of gifts;
- Ads from celebrities in this industry will be banned;
- Stablecoins must provide enough information about reserve assets before being circulated.
Specifically, the central bank of Singapore has suggested that crypto companies in the country are 'not allowed to lend to retail investors' on the grounds that the loans could be harmful to consumers. in an unregulated space like crypto. This strict proposal can to some extent 'stop' the business of many companies in this island nation.
In fact, a number of popular cryptocurrency exchanges already have some form of assessment of the retail investor's cryptocurrency knowledge, through a questionnaire, before being allowed to trade. But the bank believes that exchanges should also disclose the real financial benefits to the tokens they offer to investors.
These new proposals are open for public consultation until December 21. There is also a suggestion that crypto service providers should not use transaction 'stimulating' tactics such as giving away free tokens or other gifts. There is even a suggestion that advertising by celebrities in this industry will be banned.
In addition, the central bank also has a stricter proposal for stablecoins when it requires the issuer to fully disclose information about the token and the amount of reserve assets in cash, cash equivalents or securities. debt '100% of the par value of the stablecoin' at all times. Accordingly, debt securities must be issued by the central bank of a fixed currency or by governmental and international institutions with a credit rating of at least AA-.
The proposals above mark a major shift in Singapore's stance on cryptocurrencies. Once the preferred global crypto hub for its policies, Singaporean authorities have taken a tougher stance on digital assets following the demise of a host of big names like stablecoins. UST of Terraform Labs and native token LUNA , or default information of hedge fund Three Arrows Capital.
Oct 27, 2022