Singapore has indicated that it has no plans to impose a blanket ban on all crypto-related activities – as it was the case in some countries like China – but would rather consider introducing more measures to reduce consumer harm. According to the head of the Monetary Authority of Singapore (MAS), Mr. Ravi Menon, the reason for this is that a ban might not achieve the desired result.

“But banning retail access to cryptocurrencies is not likely to work. The cryptocurrency world is borderless,” the MAS, Managing Director said in his opening speech at the Green Shoots Seminar on Monday, August 29. “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.”

Despite that all crypto-related activities have reportedly been banned in China, reports say the industry -particularly the mining sector- has been gradually staging a comeback. A similar stance to not follow China’s steps was taken by Kazakhstan late last year. The central Asian country disclosed that it would not be banning crypto mining even though there have been reported cases of illegal mining activities going on.

MAS crypto regulation insufficient at national level  

The MAS is split between attracting crypto players and taking increasingly stronger measures to restrict retail access to cryptocurrencies. It recognizes crypto technologies as promising and with a great potential to improve financial services as well as that cryptocurrencies have taken a life of their own and are being actively traded and heavily speculated upon. While having a facilitative posture on digital asset activities, MAS frowns at speculation and seeks to restrict it.

MAS started restricting digital asset players’ promotion of cryptocurrency services in public spaces as of January 2022. Menon said it led to the removal of related ads in railway stations and the dismantling of Bitcoin ATMs. However, they have recognised that MAS’ regulation is not enough to safeguard consumers from harm. A multi-pronged approach is required, Menon said. He says that since cryptocurrency transactions can be conducted from anywhere around the world, “global cooperation is vital to minimise regulatory arbitrage”.

As a result, “MAS is actively involved in international regulatory reviews to enhance market integrity and customer protection in the digital asset space,” the head of the the financial regulatory body said. He added that the need to co-create sensible measures to protect consumer interests has been a top concern for MAS hence it has been  inviting views on possible measures to minimise harm to consumers. They plan to publicly consult on global proposals by October 2022.

Nonetheless, he noted that no amount of MAS regulation, global co-operation, or industry safeguards will protect consumers from losses if and when their cryptocurrency holdings lose value. He urged users to be more cautious.

Other measures that could be taken by the regulator besides a ban include adding frictions on retail access to cryptocurrencies, introducing customer suitability tests and restricting the use of leverage and credit facilities for cryptocurrency trading.