Regulators in Singapore caution against making retail investments in cryptocurrencies because of the high market volatility.
At a seminar on Monday, Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS), addressed the organization’s conflicting public statements regarding cryptocurrencies.
The populace charged that regional regulators were promoting pro-crypto sentiments while implying new regulations. The observation is not entirely incorrect, according to Menon’s most recent assertion. He asserts that the agency should “do a better job explaining” the circumstance.
Overall, as Menon explicitly stated, “yes to digital asset innovation, no to cryptocurrency speculation,” MAS is in favor of digital assets. Regulators want the island nation to develop into a center for distributed ledger technology innovation.
However, recent statements claim that the issue with cryptocurrencies is actually within them.
Menon says that this is where MAS’ “strict and drawn-out licensing process” for crypto services comes into play. It is the cause of restrictions on retail cryptocurrency purchases as well as warnings against them.
“Cryptocurrencies have taken a life of their own outside of the distributed ledger — and this is the source of the crypto world’s problems.”
Regulators point to the cryptocurrency market’s extreme volatility as the reason why it cannot be used as a medium of exchange or a store of value. According to MAS, there is no correlation between the cost of the aforementioned currencies and their “underlying economic value related to their use on the distributed ledger.”
These remarks follow a number of recent developments regarding digital currencies from regional Singaporean authorities. Prior to making any final decisions, MAS sent clients questionnaires on business activity and holdings on Friday, August 26.
On June 22, regulators in Singapore gave their approval for the cryptocurrency trading platform Crypto.com to launch operations there.
It was already considering restrictions on retail involvement in cryptocurrency-related activities in July.