The Monetary Authority of Singapore (MAS) in response to a parliamentary inquiry, shared insights on how the Luna collapse affected the financial system and laid out plans to interact the public in its stablecoin regulation.
The Minister in cost of MAS Tharman Shanmugaratnam in addressing the problems raised said that the collapse of the Terra ecosystem has strengthened the excessive dangers concerned in investing in the cryptocurrency ecosystem.
On the well being of the mainstream financial system, Shanmugaratnam famous that banks in Singapore had insignificant exposures to cryptocurrencies, therefore the general impression on the financial system is minimal. The MAS nevertheless couldn’t quantify the variety of Singaporeans affected by the collapse, due to restricted buyer knowledge.
The Minister additionally addressed issues about stablecoin regulation. At the second, stablecoins are thought of digital fee tokens (DPTs) alongside cryptocurrencies like Bitcoin below the Payment Service Act. The regulators are nevertheless working to deal with stablecoins as a novel asset class with a give attention to regulating the steadiness of the peg and reserve necessities. Shanmugaratnam famous that the MAS was trying to work with the public in regulating stablecoins.
State of Crypto Regulation in Singapore
Singapore’s Payment Service Act grew to become effective in January 2020 to lay the framework for fee techniques and fee service suppliers to function in the Asian nation.
In January 2022, the MAS issued a guideline to limit crypto service suppliers from publicly promoting or advertising and marketing cryptocurrency investments. The regulation additionally noticed the shutdown of crypto ATMs in the nation.
Earlier in July, the regulators expressed intentions to set new rules to defend retail buyers. The guidelines as defined will place limits on retail participation, and on the usage of leverage when transacting in cryptocurrencies.
In the wake of the Three Arrows Capital collapse, the MAS on June 30, reprimanded the hedge fund for offering false data and exceeding property below the administration threshold.
MAS at this time reprimanded Three Arrows Capital Pte. Ltd. for offering false data to MAS, and exceeding the property below administration threshold allowed for a registered fund administration firm. #enforcement #regulations
Read in full: https://t.co/LXWKTCTymO
— MAS (@MAS_sg) June 30, 2022
MAS continues to be with crypto
Despite the decision for extra crypto regulations in the area, the MAS continues to be accommodative to crypto firms that play by the Payment Service Act. It continues to be open to granting licenses for digital asset suppliers trying to function in the area. So far, Singapore has granted 14 licenses and in-principle approvals to firms together with Crypto.com, Gemini, Coinbase, and Binance.
When requested if Singapore was nonetheless pushing its plan to be a cryptocurrency hub, Shanmugaratnam said:
“From a developmental perspective, MAS’ aim has been and remains to enable the growth of an innovative and responsible digital asset ecosystem.”