The Monetary Authority of Singapore (MAS) Clarifies Crypto Regulations
The Monetary Authority of Singapore (MAS) has released its final consultation response on conduct and consumer protection obligations for crypto businesses. The report provides feedback from the central bank on a paper regarding a regulatory framework for cryptocurrencies in the country.
Regulatory Measures for Digital Payment Token Service Providers (DPTSPs)
In October 2022, MAS proposed regulatory measures for digital payment token service providers (DPTSPs). The response covers various areas including consumer access, business conduct, technology management, cyber risks, and implementation timelines.
MAS requires retail investors to undergo a risk awareness assessment before investing, and DPTSPs are prohibited from offering incentives to attract retail investors. Debt-financed or leveraged crypto transactions are also not allowed for retail traders.
Crypto payment firms should not engage in trading on their own platforms and must separate activities such as market making and acting as a broker. Additionally, conflicts of interest must be identified and mitigated appropriately, and token listing and governance policies should be disclosed to clients.
Disclosure and Implementation Requirements
DPTSPs can list self-issued tokens but must disclose relevant information to customers. They must also ensure high systems availability, recoverability, incident reporting, and implement controls to protect user information. These requirements will be mandated by MAS in early 2024 with a nine-month transition period for implementation.
DigiFT Receives Regulatory Approvals
Singapore-based crypto exchange DigiFT has obtained key regulatory approvals from MAS. It was granted a Capital Markets Services (CMS) license on December 5th and a Recognised Market Operator (RMO) license on December 1st. DigiFT is the first exchange with an automatic market-making (AMM) mechanism to go through MAS’ fintech sandbox and receive full licenses.
DigiFT will also offer secondary trading of security tokens backed by real-world assets (RWA). In June, Ripple and Circle were granted Singapore Payment Institution Licenses.
Hot Take: Singapore’s Clear Crypto Regulations Boost Confidence in the Market
The Monetary Authority of Singapore’s publication of clear and comprehensive regulations for crypto businesses is a positive development that will enhance investor confidence in the market. By imposing measures to protect consumers and mitigate risks, such as risk awareness assessments, restrictions on incentives, and separation of activities, MAS ensures a safer environment for retail traders. Additionally, the disclosure and implementation requirements provide transparency and accountability for crypto payment firms. The regulatory approvals received by DigiFT further demonstrate Singapore’s commitment to fostering innovation while maintaining regulatory oversight. These actions position Singapore as a favorable jurisdiction for cryptocurrency businesses, attracting more players to the market and contributing to its growth.
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