Crypto friendly Singapore mulls tougher restrictions amid meltdown

Singapore/New Delhi, July 5

The Singapore government is planning to introduce additional tough measures to safeguard consumers from the crypto meltdown, including restrictions on retail trading.

Tharman Shanmugaratnam, Senior Minister and Minister in Charge of the Monetary Authority of Singapore (MAS), said that the recent market conditions clearly demonstrate the risks with prices of several cryptocurrencies dipping significantly, reports ZDNet.

The country, known for a crypto-friendly atmosphere, is now mulling over additional rules in cryptocurrency trading "necessary to safeguard the general public".

"MAS has been carefully considering the introduction of additional consumer protection safeguards. These may include placing limits on retail participation and rules on the use of leverage when transacting in cryptocurrencies," Shanmugaratnam said in a written response to a parliamentary question.

The Singapore authority in January this year restricted the marketing and advertising of cryptocurrency services in public places.

Since then, crypto providers have removed cryptocurrency ATMs and advertisements from public areas and public transport venues.

The European Union last week reached a provisional agreement on cryptocurrency regulations that aimed to "protect investors and preserve financial stability".

MAS in May announced plans to pilot use cases of asset tokenisation and assess the feasibility of autonomous trading powered by Blockchain technology.

In India, the Reserve Bank of India (RBI) last week slammed unbacked crypto assets (such as Bitcoin), stablecoins and decentralised finance (DeFi) and crypto asset trading platforms, underscoring the need for regulatory guardrails to ensure financial stability and consumer and investor protection.

In its annual "Financial Stability Report" (FSR) 2022, India's central bank and regulatory body said that the early ramifications are reflected in the crypto ecosystem with one stablecoin losing almost all its value and another depegging from the US dollar.

It referred to the collapse of TerraUSD and Luna cryptocurrencies that threw many investors into a panic in May. In a crash, the once bullish TerraUSD and sister coin Luna had lost almost all their value, sending shock waves across the world.

RBI Governor Shaktikanta Das said that cryptocurrencies are a clear danger to the financial systems, adding that the world must be mindful of the emerging risks on the horizon.