Singapore: Cryptocurrencies are highly dangerous
Stricter legal regulation for retail investors in the crypto asset market in Singapore?
According to the central bank of Singapore - Monetary Authority of Singapore (MAS), imposing stricter legal regulations on individual cryptocurrency investors would be beneficial for them and would provide them with much greater protection against the huge risks associated with investing in cryptocurrencies. The institution also stated that virtual currencies are highly dangerous assets. MAS also presented the view that cryptocurrencies are not suitable for use as money.
Cryptocurrencies are highly dangerous and unpredictable
Singapore's central bank is another financial institution that has officially made it clear that it does not like crypto assets. During Monday's speech, MAS Managing Director Ravi Menon stressed the urgent need to regulate this area of the economy.
During his speech, a representative of the Singapore bank outlined five areas of risk related to cryptocurrencies, on which he currently focuses. Among them, he mentioned anti-money laundering and terrorist financing, technological and cyber risk management, protection against damage to retail investors, commitment by stablecoins to maintain their stability and mitigating potential threats to financial stability.
It is symptomatic that Menon also emphasized that MAS strongly believes that cryptocurrencies are not suitable for use as money and are highly dangerous for individual investors.
For many representatives of the crypto world, it may be controversial that in his considerations the managing director of the Singaporean central bank pointed out that virtual currencies lack three basic features of money, which are the functions of a medium of exchange, a store of value and a unit of account.
According to the same MAS representative, it is imperative to take appropriate stringent regulatory measures as soon as possible, which would make it difficult for retail investors to trade cryptocurrencies. This is currently the area on which the institution he represents wants to focus. This may include, for example, the introduction of restrictions on the use of leverage in the crypto sector.
It is not possible to ban virtual currencies
Despite such drastic measures, the same member of the banking sector added that completely preventing access to cryptocurrencies was not an option, as it would be an impossible undertaking in practice. He also noted that the cryptocurrency space has no limits.
"Nowadays, the standard is that Singaporeans have access to any number of virtual currency exchanges in the world using a mobile phone and can buy or sell any number of cryptocurrencies," he stressed.
Menon added that due to MAS's evolving regulatory approach, Singapore is one of the most comprehensive and well-prepared countries in managing digital asset risk. He also stated that he was strict to discourage as many retail investors as possible from using cryptocurrencies.
