The central bank of Singapore has mentioned that it aims to establish stronger safeguards to protect retail customers. MAS has also been consulting the public on stablecoin regulation.
The companies should respond to the given questionnaire as soon as possible, MAS said, citing people familiar with the matter.
Currently, it has issued nearly 10 licenses to companies in Singapore. The list of exchanges includes Crypto.com, DBS Vickers, the brokerage arm of DBS Bank. This is a small number compared to the 200 companies that have reported applying for a license.
This change in Singapore’s regulatory action is primarily aimed at increasing scrutiny of digital asset firms in the industry’s new regulations.
The managing director of MAS has previously mentioned that the financial regulator has been working on a regulatory framework.
The framework will help address consumer protection, market behavior, and reserve support for stablecoins in the coming months.
Areas in need of new regulations
According to the central bank, specific changes are required in certain areas within Singapore’s existing crypto regulations.
Crypto payment service providers accept risk-based capital and liquidity requirements.
This means they often need to protect client funds or these digital asset tokens from going bankrupt.
At present, however, most of these regulations are related to anti-money laundering policies and terrorist financing. While these areas receive ample attention, customer protection requires more attention.
This new regulatory framework for cryptocurrencies comes on the heels of an ongoing liquidity crisis and associated exit issues during the cryptocurrency downturn.
Most recently, Singapore-based hedge fund Three Arrows Capital (3AC) declared bankruptcy in mid-June this year after failing to meet margin calls.
