Tightening Singapore's digital currency rules to reduce speculative activities

 

Tightening Singapore's digital currency

 rules to reduce speculative activities

Singapore has announced a campaign to protect investors from 

risks associated with digital currencies by adopting

 strict procedures and regulations.

The Singapore Monetary Authority

 (MAS)

the country's central bank

has introduced proposed rules for regulating digital payment code 

(DPT) service providers.

These rules are in response to

 increased investor interest in speculation and the use of 

cryptocurrencies. The rules are expected to

 include provisions relating to the inclusion of DPTs

the prevention of 

conflicts of interest and the regulation of customer complaints.

The rules

 are scheduled to apply in mid-2024

and are intended to

 restrict speculative trading activities in Singapore.

The rules will include five key guidance for service providers

including risk assessment, prevention of trading incentives

margin and leverage bans.

The move aims to 

promote transparency, protect investors 

and stabilize the market in Singapore's cryptocurrency sector.

DPT

 providers will be barred from accepting payments

 by local credit cards

They will have to restrict the value of 

cryptocurrencies to determine the client's net worth

in accordance with the forthcoming rules.

The new

 rules will require providers to

 maintain high availability and ability to restore their vital systems

and the central bank will simultaneously urge investors to 

remain vigilant in their dealings with cryptocurrencies.

Hu Hern Shin

Deputy Director General of Financial Oversight

stated that DPT service providers are committed to protecting 

the interests of consumers who interact with their platforms

 and use their services.

However

these actions of commercial conduct 

and consumers' access can help achieve this goal.

However

they cannot avoid customers from losses associated 

with speculative nature and high risks of trading cryptocurrencies.

Clamping Down

Since the last quarter of 2022

Singapore has tightened laws 

and procedures on the digital currency ecosystem

with the aim of ensuring stability and reliability in the sector.

Singapore's Supreme 

Court classified digital assets as trustworthy property

meaning they are subject to laws on current ownership.

Following a nine

year ban on the founders of Three Arrows Capital (3AC) 

from working in the capital market, Singapore has developed

 a new regulatory framework for stable currencies.

This framework depends on the need to 

make appropriate 

disclosures and set the minimum base capital for issuers.

In July :

the Singapore Monetary Authority (MAS)

 ordered cryptocurrency exchange providers to keep customers

 assets in a legal credit fund and separate funds. 

This aims to prevent similar events in the industry.