Cryptocurrency Regulations in Singapore

Introduction of Measurements by MAS

The Monetary Authority of Singapore (MAS) is responding to the rise of speculative cryptocurrency trading, influenced by unverified success stories, celebrity endorsements and fear of missing out (FOMO).

Digital Payment Token (DPT) Regulations

MAS introduces measures for DPT service providers to discourage retail clients from investing in cryptocurrencies speculatively.

Customer Risk Awareness

DPT service providers should assess clients’ risk awareness before offering cryptocurrency services, ensuring they understand their speculative and risky nature.

Discourage Incentives

Providers are advised not to offer incentives for cryptocurrency trading, to reduce speculative behaviour among retail investors.

Prohibition of Financing and Leveraged Transactions

DPT service providers must not offer financing, margin or leveraged transactions.

Rejection of Credit Card Payments

DPT service providers are urged to decline payments with locally issued credit cards for cryptocurrency transactions.

Exclusion of Cryptocurrency Holdings in Net Asset Value

When calculating a client’s net worth, their cryptocurrency holdings will not be included.

Risk Recognition

MAS recognizes the “inherently speculative and highly risky” nature of cryptocurrency trading and emphasizes that these measures cannot fully protect clients from potential losses.

Guardian Project and Global Layer One

MAS launches five industrial pilots to test asset tokenization under Project Guardian and explores an open digital infrastructure for tokenized financial assets with Global Layer One.

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Focus on Institutional Adoption

These initiatives seek to encourage institutional adoption of digital assets, improve liquidity, unlock investment opportunities and increase financial market efficiency.

General Summary

Singapore implements balanced regulations to protect retail investors while promoting innovation in the digital asset space.