The Central Bank of Singapore said it aims to create stronger safeguards to protect its retail customers. MAS is also consulting the public for stablecoin regulation.
Referring to people familiar with the subject, MAS stated that companies should respond to the questionnaire as soon as possible.
It has now granted close to 10 licenses to companies in Singapore. The list of exchanges includes Crypto.com, the brokerage arm of DBS Bank, DBS Vickers. This is only a small number compared to the 200 companies applying for the license.
This change in regulatory action in Singapore is mostly aimed at intensifying scrutiny on digital asset firms amid new regulations in the industry.
The chief executive of MAS had previously stated that the financial watchdog is working on a regulatory framework.
This framework will assist in consumer protection, market behavior and reserve support for stablecoins over the next few months.
Areas Requiring New Arrangement
There are certain areas that require certain changes to the current crypto regulations in Singapore, according to the central bank.
Crypto payment service providers are subject to risk-based capital and liquidity requirements.
This means they are often needed to protect client funds or these digital asset tokens from going bankrupt.
Currently, however, most of these regulations relate to anti-money laundering policies and financing of terrorism. While these areas get a lot of attention, client protection requires more attention.
This new regulatory framework for crypto comes after the ongoing liquidity crisis as well as related pullback issues amid a crypto downturn.
Recently, Three Arrows Capital (3AC), a Singapore-based hedge fund, was declared bankrupt after failing to meet margin calls in mid-June this year.