Following the failure of Singaporean cryptocurrency hedge fund Three Arrows Capital, the Monetary Authority of Singapore (MAS) is putting out measures to better regulate the industry (3AC).
Cointelegraph stated that two consultation papers on ideas for regulating the activities of stablecoin issuers and digital payment token service providers (DPTSP) under the Payment Services Act have been released by the central bank of Singapore.
Cointelegraph further noted that both consultation papers, which were released on October 26, seek to lower consumer risks associated with cryptocurrency trading and raise the bar for stablecoin-related activities. The authority claimed that using “any form of credit or leverage in the trading of DPTs” would “magnify losses,” possibly resulting in losses greater than a customer’s investment.
In section 3.20, MAS sought to prohibit DPTSPs from offering “any credit facility” to retail clients, whether it be in the form of fiat money or cryptocurrency. The regulator contends that cryptocurrency service providers shouldn’t be permitted to receive payments made with credit cards in exchange for cryptocurrency services.
By December 21, 2022, the regulator urged interested parties to submit their comments on the plans.
Crypto financing can yet survive this bad market, according to some Bitcoin analysts, but there are problems with short-term assets and liabilities that need to be resolved first.
(With insights from Cointelegraph)
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