The Blockchain Association of Singapore spoke out against the central bank's proposed crypto restrictions.
Singapore's Monetary Authority recently proposed a number of measures to limit retail customer access to cryptocurrencies.
While the proposal was deemed "overly restrictive," the association agreed on other points in its 11-page feedback.
The central bank's crypto proposals, calling them unnecessarily restrictive.
Singapore's Monetary Authority recently proposed a number of measures to limit retail customer access to cryptocurrencies. These measures would ban investors from borrowing funds to purchase tokens. They would also restrict companies from lending or staking their coins in order to generate profits.
In response, the Blockchain Association of Singapore published an 11-page feedback against such a blanket ban. They argued that such measures would just drive people who were interested to seek unregulated offshore options.
The association took particular issue with MAS's proposal to outlaw the lending of tokens for the purpose of earning interest. This is one of the key reasons for investing in digital payment tokens, according to the association. Disagreements were also disclosed in the document, such as offering retail incentives.
Notably, the document was not solely critical, with the association discovering areas of agreement with the monetary authorities. The association agreed that clients should not be allowed to borrow funds in order to invest in cryptocurrency. They also agreed that cryptocurrency companies should make a clear distinction between their own assets and those of their customers.
Chia Hock Lai, chairman of the association's board, stated that without the necessary governmental approvals, he wanted to adopt a more cautious and targeted approach. This would necessitate more active participation on the side of the association. For example, by increasing consumer education about the risks of engaging with unregulated entities. Lai also recommended stepping up enforcement against people who engage in regulated activities.
Singapore, despite its reputation for financial openness, has every reason to be cautious of cryptocurrencies. Several of the top crypto firms that failed in the last year, like Three Arrows Capital, had their offices in the city. Singapore's state investment fund recently wrote out its $275 million investment in FTX.
However, this does not imply that the city is not enthusiastic about blockchain-based financial advancements. MAS recently collaborated with investment bank JPMorgan to test international decentralized finance settlements.
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