<article>Singapore’s central bank has proposed a slew of regulatory measures on cryptocurrency trading and stablecoins that seek to bring down retail investor risk.
The Monetary Authority of Singapore (MAS) is also looking at supporting the development of stablecoins as a credible medium of exchange in the digital asset ecosystem.</article>

Singapore’s central bank has proposed a slew of regulatory measures on cryptocurrency trading and stablecoins that seek to bring down retail investor risk.
The Monetary Authority of Singapore (MAS) is also looking at supporting the development of stablecoins as a credible medium of exchange in the digital asset ecosystem.
To reduce the risk to consumers from speculative trading in cryptocurrencies, the regulator has proposed that digital payment token (DPT) service providers should not offer customers a credit facility – fiat currencies or digital payment tokens – to enable them to buy crypto.
These service providers should also not enter into leveraged crypto transactions with retail customers or accept payments from retail customers using credit cards or charge cards, the MAS said, in a 35-page consultation paper issued on Wednesday.
MAS has sought feedback from the public on measures to limit consumer access and improve business conduct in a growing space that it considers inherently risky.
It, however, noted that an outright ban will not be feasible as cryptocurrencies or digital payment tokens (DPTs) have a supporting role in the broader digital asset ecosystem.
The MAS has proposed that DPT service providers should provide relevant risk disclosures to enable retail consumers to make informed decisions regarding crypto trading.
Just like other financial institutions such as banks, they will be required to maintain the high availability and recoverability of their critical systems.
“Notwithstanding these regulatory measures, consumers must continue to exercise utmost caution when trading in DPTs and must take responsibility for such trading. Regulations cannot protect consumers from losses arising from the inherently speculative and highly risky nature of DPT trading,” the regulator said.
The measures apply to retail customers who are not accredited investors. Singapore’s Securities and Futures Act defines accredited investors as individuals with over S$2 million in net personal assets (among which the net value of the individual’s primary residence is capped at S$1 million), has over S$1 million in net financial assets, or has over S$300,000 in income over the preceding 12 months.
In determining which crypto traders qualify as accredited investors, the regulator is considering excluding the value of crypto holdings from the value of net personal assets, or imposing a cap, for example of S$200,000, on the value of crypto holdings that can be counted towards the threshold.
<h3>Stablecoins</h3>
The MAS is also looking to regulate the issuance of stablecoins which are pegged to a single currency (SCS), where the value of SCS in circulation exceeds $5 million. The key proposed issuer requirements relate to value stability, reference currency, disclosures and prudential standards.
This is because the central bank notes that stablecoins have the potential to be a medium of exchange to facilitate transactions in the digital asset ecosystem, provided they are well-regulated and securely backed.
The current regulatory framework, which the MAS says is “not adequate” primarily addresses money laundering and terrorism financing risks and technology and cyber risks. It will be expanded to ensure that regulated stablecoins have a high degree of value stability.
For instance, SCS issuers must hold reserve assets in cash, cash equivalents, or short-dated sovereign debt securities that are at least equivalent to 100% of the par value of the outstanding SCS in circulation. These assets must be denominated in the same currency as the pegged currency. All SCS issued in Singapore can be pegged only to the Singapore dollar or any Group of Ten (G10) currencies.
Other stablecoins in the market, such as those pegged to a basket of currencies, commodities, or algorithmic mechanisms will continue to be treated as DPTs, as they are seen to be “less stable”.
Aside from a requirement to publish a white paper disclosing the details of the SCS, the issuers must, at all times, meet a base capital requirement of the higher of S$1 million or 50% of the annual operating expenses of the SCS issuer.
They are also required to hold liquid assets which are valued at a higher of 50% of annual operating expenses or an amount assessed by the SCS issuer to be needed to achieve recovery or an orderly wind-down.
Banks in Singapore will also be allowed to issue SCS. No additional reserve backing and prudential requirements will apply when the SCS is issued as a tokenised form of bank liabilities given the existing rigorous capital and liquidity frameworks applied to banks.
For non-issuance services, DPTSPs can offer all types of stablecoins provided they clearly label the MAS-regulated SCS to distinguish them from the unregulated ones.
Singapore’s central bank has plans to issue a set of guidelines after this consultation and later legislate them. It is looking at a period of six to nine months for service providers to meet these guidelines.
This initiative comes shortly after MAS managing director Ravi Menon first hinted at further measures to reduce consumer harm in a speech in August.
He had highlighted that an outright ban is unlikely to work, given the borderless nature of the cryptocurrency world, but that there is now “greater impetus” among global regulators to strengthen regulations amid the risks of market manipulation.

Singapore's MAS proposes regulatory measures on crypto trading, stablecoins

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