On Monday, the Monetary Authority of Singapore (MAS) banned all crypto firms in from offering lending and staking services to retail clients in the country. The regulator, in a press statement, described these services as unsuitable for members of the retail public. However, MAS said the services can be offered to institutional and accredited clients in compliance with local regulations.
This new directive, according to reports, comes amidst ongoing efforts by the regulator to reform the country’s digital sector. In the press statement, it also outlined other requirements for digital asset firms in the country to follow. One of these requirements, mandates the firm to transfer assets belonging to customers to a statutory trust. This, according to MAS, must be carried out before the end of the year. With this new directive, Singaporean authorities want to address the risk of losses or wrong usage of customers’ assets. Also, the rule ensures easy recovery of users’ assets whenever any of the firms become bankrupt.
MAS publishes report on building interoperable networks for digital assets
It is noteworthy that these new directives come barely a week after MAS published a report on efficient mechanisms for developing open, interoperable networks for virtual assets. Notably, the report contained the outcome of its consultation with experts at the Bank for International Settlements (BIS) and Committee on Payment and Market Infrastructure (CPMI). Similarly, experts from other well-known financial firms also contributed to the report.
According to MAS, it seeks to ensure that the digital asset sector in the country complies with international standards. In the report, the regulator assessed the application of CPMI-IOSCO standards for the development of digital asset models. Also, it announced plans to expand its ongoing Project Guardian. The pilot carried out in this project was geared toward testing the potential associated with the tokenization of assets. During the testing, MAS used eleven financial firms as the Project Guardian Industry Group. Meanwhile, MAS also leveraged the report to announce the completion of a pilot on the issuance of digital assets by HSBC, Marketnode, and UOB. The pilot identified possible situations with lower issuance and servicing cost.
Initially, Singapore was notable as one of the crypto-friendly nations across the globe. However, it started to change its stance on the industry following the 2022 downturn that left millions of investors stranded.