Singapore consults on regulation of retail cryptocurrencies and stablecoins
The Monetary Authority of Singapore (MAS) Proposed New measures to regulate cryptocurrency exchanges and retail of cryptocurrencies and address risks associated with fiat-backed stablecoins.
On October 26, Singapore’s central bank and financial regulator MAS issued two consultation papers.of first paper Outlining new measures proposed to protect consumers, the MAS says it aims to curb cryptocurrency speculation. These include:
- Require retail investors to perform a risk awareness assessment before trading cryptocurrencies.
- Restrictions on offering incentives to retail investors to trade cryptocurrencies.
- Restrict retail investors from trading virtual currency using credit or leverage (including credit cards to purchase virtual currency).
- require exchanges to segregate customer assets from their own (and, in some cases, appoint independent managers);
- Prohibit retail users from lending and borrowing crypto assets, effectively banning consumers from so-called “earning” or staking products ( number of notable bankruptcies including the companies that provided these products);
- Request a crypto exchange to identify and mitigate conflicts of interest.When
- Demand that exchanges take steps to combat market fraud by implementing systems and procedures to promote fair, orderly and transparent markets.
MAS explains why it is increasing consumer protection:
Trading cryptocurrencies is… extremely risky and not suitable for the general public. However, cryptocurrencies play a supporting role in the broader digital asset ecosystem, and banning them is not practical. To that end, MAS requires good business conduct and appropriate risk disclosure.
second paper We are proposing a new regime to regulate and support the development of a trusted and stable coin that facilitates digital transactions. The proposed regulation covers stablecoins with a circulation value of more than S$5 million (approximately US$3.54 million). The proposed measure would create a class of MAS-licensed single-currency stablecoins (or SCS). The main measures are as follows.
- Stablecoin issuers must maintain a reserve asset (such as cash) of at least 1:1 value in circulation and provide timely redemption to their customers.
- Regulated stablecoins must be pegged to a single currency.
- Stablecoin issuers are required to publish white papers.When
- Stablecoin issuers must meet basic capital requirements.
Additionally, banks in Singapore will be allowed to issue stablecoins without additional reserve backing or prudential requirements in light of existing banking regulations.
MAS is also seeking input on whether it should reserve the right to designate systematic stablecoin arrangements as designated payment systems.
In a statement, MAS expressed Ongoing support for stablecoin development:
Stablecoins, if well regulated and securely backed, have the potential to become a medium of exchange for facilitating transactions in the digital asset ecosystem. The current regulatory framework… will be extended to ensure that regulated stablecoins have a high degree of value stability.
Consultations on both documents are open until 21 December 2022.
Consultation documents are as follows. recent comments By the MAS, which has demonstrated the city-state’s intention to support the growth of the tokenization and digital asset industry while addressing potential consumer harm.
some critics express concern Proposed consumer protections may be overly prescriptive, and prohibiting token purchases using credit or leverage could inadvertently encourage retail investors to trade in cryptocurrency derivatives. Proposals prohibiting the offering of earning or staking products would prohibit even regulated entities from offering these products, while retail users seek out unregulated DeFi or foreign offerings. encourage you to Meanwhile, Singapore could face the same restrictions faced by other jurisdictions in monitoring and controlling transactions by citizens on overseas platforms.
Nonetheless, these proposals demonstrate Singapore’s determination to solidify itself as an international hub for cryptocurrency development and fintech innovation. EU and The imminent MiCA systemSingapore is likely to join the EU at the forefront of cryptocurrency regulation, building its own regulatory regime, which will draw attention from legislators around the world.
Visa Takes Steps Toward Offering Crypto Wallets
In October, payment major Visa International Service Association (visa), a subsidiary of Visa Inc., submitted two files trademark application United States Patent and Trademark Office (USPTO) covers a wide range of cryptographic products and services.of trademark application It relates to digital wallets, non-fungible tokens and the metaverse.
Visa is active in the cryptocurrency space and has partnered with several companies. 65 crypto companies Including the provision and exchange of wallet services that enable cryptographic payments using cards.of December 2021, Visa Launches Crypto Advisory Service, May 2020 Visa has filed a patent for a fiat-linked cryptosystem using its privately-licensed DLT platform.
recent visa trademark application cover:
Online, non-downloadable software for managing digital transactions. Non-Downloadable Virtual Goods. A non-downloadable virtual commodity, a collection of non-fungible tokens. Software not available for online download for use as digital currency wallet and storage service software. Software that cannot be downloaded online for use as a cryptocurrency wallet.
This development by Visa follows other companies that have filed cryptographic-related trademark applications with the USPTO over the past year. american express, new york stock exchange, meta When master Card, paypal and western union.
US patent and trademark applications are often actively pursued by companies in connection with potential projects, and not all applications become final proposals. Only time will tell if Visa really offers more crypto-enabled products to its huge worldwide customer base.
Debate over industry standards for digital assets heats up
FTX CEO and co-founder Sam Bankman-Fried said: Released Draft Set of Possible Digital Asset Industry Standards This is the full federal regulatory system of the United States ( suggestion). Despite positive progress in recent months, The Proposed Standard is an attempt to provide suggestions, initiate a regulatory dialogue, and establish consensus on industry standards.
The proposal covers hacking and accountability, asset lists, tokenized equities, consumer protection, sanctions compliance, DeFi, and stablecoins. Start by considering how to negate the effects of hacking. outstanding problem in the last few months. The proposal proposes the “5-5 standard” as a consensus negotiation standard between the victim protocol and the hacker in the event of a hack. As standard, he maintains 5% or $5 million (whichever is lower) as a bug bounty, while only needing to make sure the protocol reserves are sufficient to complete the customer. amount must be returned to the hacker.
Then, perhaps unsurprisingly, the proposal describes which digital assets can and cannot be listed on exchanges. According to the proposal, FTX’s legal team will: howie test and other relevant case law and guidance. If an asset is considered a security, it will be treated as such. If an asset does not turn out to be a security, FTX generally treats it as a non-securities instrument unless otherwise directed by the SEC or a court of competent jurisdiction. Ultimately, Bankman-Fried hopes that registration of digital asset securities will be done in a way that protects consumers and enables innovation.
The proposal also focuses on consumer protection and encourages crackdowns on assets that misrepresent or make misleading claims to consumers. Bankman-Fried also suggests that by default, especially in the case of retail, the system should not meaningfully operate on credit. This is because retail investors should not lose more than they have deposited on the platform. As such, the credit given by the platform should be scrutinized if there is a potential for social loss among other innocent investors on the platform.
Sanctions compliance and DeFi proposals, including a proposal that DeFi front-ends could be licensed and incorporate sanctions screening, have sparked controversy among some DeFi advocates.
The proposal has made a useful contribution to the regulatory debate on digital assets and has helped spark debate on industry regulatory standards. Many prominent crypto personalities Commented on the proposal, including Erik Voorhees, founder of ShapeShift. live online debate Discussed with Bankman-Fried the merits of the proposed standard. This debate is expected to intensify for some time to come.