In a significant move aimed at instilling confidence in the cryptocurrency market and shielding investors from potential losses, Singapore’s Monetary Authority of Singapore (MAS) has mandated crypto service providers to deposit customer assets into a statutory trust by the end of the year. This measure is designed to minimize the risk of loss or misuse of customers’ assets and facilitate the recovery of assets in the event of the service provider’s insolvency1.
Following public consultation launched in October 2022, the MAS has also curtailed cryptocurrency service providers from enabling lending and staking tokens to retail customers. Institutional and accredited investors, however, may still avail of these services. The MAS continues to seek public input on legislative amendments focusing on the execution of these new requirements1.
Angela Ang, a senior policy advisor for blockchain intelligence firm TRM Labs and a former MAS regulator, stated that these regulatory changes should not surprise anyone who has been keeping an eye on the Singapore market. Ang pointed out that Singapore’s requirements mirror those of other payment service providers and are not as stringent as those in Hong Kong. The MAS’s decision to forgo certain proposals, such as requiring an independent custodian for customer assets, indicates its attentiveness to industry feedback and practical constraints1.
Furthermore, the MAS hinted that its stance on prohibiting crypto entities from facilitating lending and staking of tokens for retail customers could be reconsidered in the future. It emphasized that it would continue to monitor market trends and consumer risk awareness, adjusting its measures to ensure they remain balanced and appropriate1.
This move is in line with Singapore’s ambition to support technologies within the industry that can enhance existing traditional financial systems. Concurrently, it has been “brutal and unrelentingly hard” on malpractice within the crypto industry, underlining its commitment to safeguarding the integrity of the sector. Recently, the MAS also suggested ways to develop open, interoperable networks for tokenized digital assets and establish standards for the use of digital money1.
This regulation showcases Singapore’s balanced approach towards fostering a secure and innovative crypto environment, encouraging the dance of digital currencies on a safer stage.
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