The Monetary Authority of Singapore (MAS) presented two consultative documents aimed at reducing potential consumer harm from the volatility of the cryptocurrency market.
MAS is inviting comments from interested parties by December 21.
The proposed measures include banning lending by firms backed by digital assets held by retail customers, and segregation of proprietary and client accounts.
Trading platforms will be required not to offer incentives to attract retail clients and to refrain from accepting credit card payments or from extending them credit.
MAS intends to deter speculative trading. In January, the regulator imposed restrictions on advertising crypto services in public places.
The central bank said it aims to ensure a high degree of stability in the prices of stablecoins.
In the case of fiat-pegged tokens (SCS) with a circulating value exceeding 5 million SGD ($3.53 million), issuers must hold reserves of at least 100% of the nominal value of the SCS in circulation. They may consist of cash, cash equivalents, or short-term sovereign debt securities.
At the same time, assets must also be denominated in the fiat to which the stablecoin is pegged.
MAS allows the issuance of SCS pegged to any of the G10 currencies. Issuers may be banks. The base capital must be the greater of two amounts — 1 million SGD (~$709,000) or to cover half of annual operating costs.
No additional reserve or prudential requirements are contemplated.
Earlier authorities promised to fight violations in the sector “cruelly and relentlessly”.
Shortly before that, Bloomberg sources reported that MAS sent inquiries to industry players about their activities and assets.
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