- Both consultation papers seek to reduce consumer trading risks.
- The second consultation paper offers suggestions for Singapore’s stablecoin regulatory framework.
The Monetary Authority of Singapore (MAS) is putting forth proposals to more effectively control cryptocurrencies. Two consultation papers on ideas for regulating the activities of stablecoin issuers and digital payment token service providers (DPTSP) under the Payment Services Act have been released by the central bank of Singapore.
Both consultation papers seek to raise stablecoin transaction standards and lower consumer risks associated with cryptocurrency trading. The first document contains suggestions for services involving digital payment tokens (DPTs) or services connected to well-known cryptocurrencies like Bitcoin, Ethereum, and XRP.
The regulator contends that cryptocurrency service providers shouldn’t be permitted to accept payments made with credit cards in exchange for cryptocurrency services. The MAS also advised DPTSPs to think about implementing consumer tests to gauge retail customers’ awareness of the dangers associated with cryptocurrencies.
Restrict Stablecoin Issuers From Lending
A set of business and operational requirements for stablecoin issuers are provided in the second consultation paper, which makes regulatory approach proposals for stablecoins in Singapore. The MAS suggested banning the lending or staking of single-currency pegged stablecoins (SCS), as well as the trading of other cryptocurrencies.
A minimum base capital requirement of $1 million or 50% of the SCS issuer’s annual operating expenses was also proposed by the regulator. According to MAS, the capital must always be held and contain liquid assets. By December 21, 2022, the regulator requested comments on the proposals from all interested parties.
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