Since January this year, MAS has restricted digital asset players from promoting cryptocurrency services at public spaces. This has led to the dismantling of Bitcoin ATMs and the removal of advertisements in MRT stations. But despite these warnings and measures, surveys show that consumers are increasingly trading in cryptocurrencies. This appears to be a global phenomenon, not just in Singapore. Many consumers are still enticed by the prospect of sharp price increases in cryptocurrencies. They seem to be irrationally oblivious about the risks of cryptocurrency trading. Consumer-related risks have gained the attention of regulators around the world. MAS is therefore considering further measures to reduce consumer harm. Adding frictions on retail access to cryptocurrencies is an area we are contemplating. These may include customer suitability tests and restricting the use of leverage and credit facilities for cryptocurrency trading. But banning retail access to cryptocurrencies is not likely to work. The cryptocurrency world is borderless. With just a mobile phone, Singaporeans have access to any number of crypto exchanges in the world and can buy or sell any number of cryptocurrencies. The cryptocurrency market is also fraught with risks of market manipulation. These risks include cornering and wash trades – actions that mislead and deceive market participants about prices or trading volumes. They compound the inherent volatility and speculative nature of cryptocurrencies and can severely harm consumers. There is greater impetus now among global regulators to enhance regulations in this space. MAS will also do so.

Safeguarding consumers from harm requires a multi-pronged approach, not just MAS regulation. First, global cooperation is vital to minimise regulatory arbitrage. Cryptocurrency transactions can be conducted from anywhere around the world. MAS is actively involved in international regulatory reviews to enhance market integrity and customer protection in the digital asset space. Second, the industry has an important role in co-creating sensible measures to protect consumer interests. MAS has been sharing its concerns with the industry and inviting views on possible measures to minimise harm to consumers. We will publicly consult on the proposals by October this year. Third, consumers must take responsibility and exercise judgement and caution. No amount of MAS regulation, global co-operation, or industry safeguards will protect consumers from losses if their cryptocurrency holdings lose value. UPHOLD THE PROMISE OF STABILITY IN STABLECOINS Stablecoins can realise their potential only if there is confidence in their ability to maintain a stable value. Many stablecoins lack the ability to uphold the promise of stability in their value. Some of the assets backing these stablecoins – such as commercial papers – are exposed to credit, market, and liquidity risks  There are currently no international standards on the quality of reserve assets backing stablecoins. Globally, regulators are looking to impose requirements such as secure reserve backing and timely redemption at par. MAS will propose for consultation a regulatory approach for stablecoins, also by October. MITIGATE POTENTIAL FINANCIAL STABILITY RISKS Financial stability risks from digital asset activities are currently low but bear close monitoring.