The MAS will also reportedly ban domestic cryptocurrency organizations from providing staking and lending services to retail investors.
The Monetary Authority of Singapore (MAS) will reportedly insist that cryptocurrency firms hold customers’ assets in designated trusts by the end of 2023.
A few months ago, FTX experienced its infamous collapse, triggering huge losses for investors, with many individuals and entities accusing the exchange of commingling user funds and defrauding customers.
New Requirements
According to Bloomberg, Singapore regulators will enforce the obligation to give customers the greatest possible protection.
In addition to storing users’ assets in trust, cryptocurrency organizations may be prohibited from providing lending and staking services to retail investors. It is worth noting that the Thai Securities and Exchange Commission (SEC) has also taken similar measures.
MAS began considering these rules in October 2022, a month before the FTX collapse that shocked the industry.
Singapore has recently emerged as a booming cryptocurrency region with its regulatory framework attracting several companies. Cryptocurrency exchange Gemini announced last month that it would add more than 100 employees in the city-state.
For his part, Ripple’s chief legal officer, Stuart Alderoty, highlighted Singapore’s approach to the industry, saying it had established a “workable framework that truly combines consumer protection, market integrity and innovation”.
His comments came shortly after Ripple received an in-principle payments license from the MAS. Recall that the enterprise blockchain provider is in a long-running dispute with the U.S. SEC.
Cryptocurrency adoption surges in Singapore
Providing additional security to Singaporean crypto players sounds reasonable, considering the rising number of locals joining the ecosystem in recent times.
The Independent Reserve estimated in a survey that 43% of Singapore residents hold some amount of digital assets (the highest level since the 2021 bull run).
54% of people are joining the ranks of diversifying their portfolios, while half of investors who bought cryptocurrencies last year did so on the advice of family, friends or influenced by social media. Bitcoin is the most popular digital asset in Singapore, with 87% of people aware of it. Ethereum ranks second with 51%.
Lasanka Perera, Chief Executive Officer of the Independent Reserve Bank of Singapore, said:
“The growing popularity of altcoins shows that more Singaporeans are becoming more aware of cryptocurrencies other than Bitcoin.
This is a promising sign for the industry as more investors gain exposure to various types of blockchains and projects that have innovative utility and the potential for wider adoption in real-world applications and use cases.”
