Singapore mulls restricting retail access to cryptocurrencies

Singapore, August 30 (ANI): Singapore's central bank Monetary Authority of Singapore is contemplating adding frictions on retail access to cryptocurrencies through various measures including customer suitability tests and restricting the use of leverage and credit facilities for such trading.
These measures are meant to reduce consumer risk while trading in such volatile assets.
The main concern regarding cryptocurrencies is that prices of such assets are highly volatile, driven largely by speculation rather than any underlying economic fundamentals, Ravi Menon, Managing Director at the Monetary Authority of Singapore said in his opening remarks at the Green Shoots Seminar on Monday.
It is very risky for the public to put their money in such cryptocurrencies, as the perceived valuation of these cryptocurrencies could plummet rapidly when sentiments shift, Menon said.
However, the Monetary Authority of Singapore feels a complete ban on retail access to cryptocurrencies is not likely to work.
"The cryptocurrency world is borderless. With just a mobile phone, Singaporeans have access to any number of crypto exchanges in the world and can buy or sell any number of cryptocurrencies," Menon said.
The extreme price volatility of cryptocurrencies rules them out as a viable form of money or investment asset, Menon added.
He said safeguarding consumers from harm requires a multi-pronged approach and not just regulation by the Singapore central bank.
"First, global cooperation is vital to minimise regulatory arbitrage. Cryptocurrency transactions can be conducted from anywhere around the world. MAS is actively involved in international regulatory reviews to enhance market integrity and customer protection in the digital asset space."
The Singaporean central bank has been sharing its concerns with the industry and inviting views on possible measures to minimise harm to consumers and it will publicly consult on the proposals by October this year.
Further, Menon believes consumers must take responsibility and exercise judgement and caution as no amount of central bank regulation, global cooperation, or industry safeguards will protect consumers from losses if their cryptocurrency holdings lose value.
Since January this year, it has restricted digital asset players from promoting cryptocurrency services in public spaces.
"But despite these warnings and measures, surveys show that consumers are increasingly trading in cryptocurrencies. This appears to be a global phenomenon, not just in Singapore. Many consumers are still enticed by the prospect of sharp price increases in cryptocurrencies," Menon added in his remarks. (ANI)