Any new MAS’ rules may also include tests to determine customer suitability, Managing Director Ravi Menon said in a speech on Monday, noting that many people seem to be “irrationally oblivious” about the trading risks. It plans to publicly consult on the proposals by October, he said.
By October, the regulator will also consult industry participants about regulation of stablecoins, an issue that came to the forefront after TerraUSD collapsed in a US$40bil wipeout, sending shockwaves through digital assets markets. Menon said regulators globally are looking to impose requirements such as secure reserve backing and timely redemption at par for stablecoins.
Singapore was early to study blockchain technology as well as tout its ambitions as a crypto hub. It is now trying to achieve a delicate balance between encouraging blockchain innovation and protecting investors from some of the risks of participating in a nascent market. Singapore started tightening crypto rules early this year with a ban on advertising, and plans to require virtual-asset providers to be licensed locally even if they only do business overseas. The regulator further stepped up scrutiny of the sector in recent weeks, sending a questionnaire to some applicants and holders of its digital-payments license seeking highly granular information about their business activity and holdings.