Through two documents published on Wednesday (27), the Monetary Authority of Singapore (MAS) showed its intention to ban citizens from purchasing cryptocurrencies using credit cards, as well as to regulate the stablecoin sector. Going further, the intention is also cited to require cryptocurrency brokers to perform a small test to see if their clients understand the risks in such investments, mainly due to the high volatility of this market. Such plans are a continuation of the government agency to, in theory, protect its citizens. In January of this year, the country also disabled ATMs that worked with cryptocurrencies, claiming they could encourage consumers to buy them on impulse. Another point debated at the time was cryptocurrency announcements, especially memecoins that were on the rise at the time. Anyway, MAS also stated that it encourages the development of the industry, mainly through projects that have use cases.
Singapore targets stablecoins
According to the title of the document entitled Approach to Stablecoin Related Activities suggests, this first one is related to stablecoins. As a highlight, the Monetary Authority of Singapore highlights the difference they can have. The first category would be single-currency-backed stablecoins, but the text notes that there may be differences between these projects. As a highlight, it cites cryptocurrencies such as TerraUSD (UST) as being the most dangerous. “MAS views algorithmically indexed stablecoins not backed or backed by other cryptocurrencies as more susceptible to volatility in value. Likewise, these stablecoins will also continue to be treated as DPTs. [tokens de pagamento digital].” Finally, he cites the intention to create a regulation that increases the reliability of stablecoins, to be issued within Singapore and under the supervision of its state agencies.
Regulatory framework on stablecoins proposed by the Monetary Authority of Singapore. Source: Reproduction.
Singapore wants to ban credit card purchases of cryptocurrencies
In the second document, entitled Measures for Digital Payment Token Servicesthe Monetary Authority of Singapore points out the agency’s concern in contracting debt for the purchase of cryptocurrencies, mainly due to their volatility.
“Prices of DPTs [tokens de pagamento digital] are highly volatile and subject to strong fluctuations. Using any form of credit or leverage in trading DPTs would result in increased losses and could cause the client to lose more than the entire amount invested.”
Therefore, one of the proposed restrictions would be a ban on cryptocurrency purchases through credit cards and other means that could make the investor incur debt, such as loans of any kind. Finally, it is worth noting that the agency is in talks with the industry, receiving comments on both documents until December 21st before they are approved.
