Singapore wants to tighten the access of retail to cryptocurrencies

The Singapore financial supervisory authority has distanced itself from “strongly speculated” cryptocurrencies after a number of scandals this year, which have harmed the efforts of the city state to be considered a safe hub for the volatile asset class.

The managing director of the Monetary Authority of Singapore, Ravi Menon, tried to clarify his position as a cryptoscept on Monday with the title "Yes to Digital Asset Innovation, No To Cryptocurrency Speculation" after he had accused of sending mixed signals.

Due to its extreme price volatility,

cryptocurrencies are not a “viable form of money or fixed assets”, Menon said, while announcing that the regulatory authority would further restrict the access of small investors to digital currencies. But the MAS still believes in the "transformative" economic potential of the broader ecosystem of digital assets, including tokenization.

Menon's comments emphasized the difficulties that many financial supervisory authorities had in the control of the free -range and speculative crypta area while trying to benefit from the investments, shops and talents that are part of them.

Singapore, which has no natural resources and wants to participate in the latest progress in financial technology, began to award licenses to actors in the crypto sector last year and to enable both private and institutional trade in the asset class.

Many global companies moved to Singapore, attracted to the regulatory environment and low taxes. Some of the world's largest crypto exchanges, including Binance, Gemini, Coinbase and Crypto.com, have applied for all operating licenses, although some, including Binance, have now withdrawn their applications.

According to a report by KPMG, the investments in Singapore crypto and blockchain companies in 2021 rose to a record of USD 1.48 billion, the total of the total of the previous year and almost half of the total in the Asian-Pacific area for 2021.

The balancing act of the city, however, was derailed by a number of top-class fraud and scandals that were echoed through the global crypto landscape this year, as well as through the collapsing commercial volumes, which contributed to a painful reset of the once sky-high ratings.

Even crypto companies that had received the coveted MAS license permit were knitted. Hodlnaut, a Singaporian crypto loan who received the basic license permit for offering token swaps in March, reduced the majority of his workforce, stopped the withdrawals and gave an investigation by the Singapore police this month. Hodlnaut had supported the Luna cryptocurrency ecosystem on its platform, which crashed spectacularly in May.

South Korean prosecutors investigate the company based in Singapore Terraform Labs, the company behind the collapsed stable coin Terrausd, which was associated with Luna.

The top-class collapse of Three Arrows, one of the best-known crypto investors who was located in Singapore and registered on the British Virgin Islands, continued to undermine the city's call as a secure financial center. In June, Singapore promised to be "brutally and relentlessly tough" in bad behavior.

In his speech on Monday, Menon said that MAS would take stricter measures to restrict retail access to cryptocurrencies. The regulatory authority had already reinforced warnings and prevented crypto players from promoting public services. Bitcoin money machines were dismantled and advertising for public transport was removed.

Despite these warnings and measures, surveys showed that consumers increasingly acted with cryptocurrencies, Menon said, and "MAS is therefore considering further measures to reduce consumer damage".

This includes the creation of aptitude tests for customers and the restriction of the use of loans for trade. But complete bans would not work, he said, since Singapore could access stock exchanges with their mobile phones all over the world.