In response to a question from the House on 1 August 2022 regarding the licensing of digital payment token providers, the MAS government agency has reached a consensus with international watchdogs that the industry needs to be more regulated.
Tharman Shanmugaratnam added that MAS will consult its initial encryption framework in the coming months.
MAS 'proceeding with caution'
Shanmugaratnam reiterated that MAS is still cautious about digital currencies, and using digital currencies is "dangerous" and discourages retail investors from participating in transactions.
This stance echoes sentiment expressed by the MAS in January 2022. At the time, it discouraged retail investors from speculating in assets they deemed too volatile. It also shut down crypto ATMs.
Regarding the recent collapse of the TerraUSD stable currency and the current many high-profile players, including Celsius, Minister BabelFinance said that the wider Singapore economy will not be affected in any way by spillovers from traditional markets. He noted that neither were any key institutions in China exposed to any Troubled company. The troubled hedge fund is from Singapore and has recently declared bankruptcy. According to reports, the CEO of TerraformLabs is the founder of TerraUSD`s stablecoin who lives in Singapore and was asked to notify the South Korean government when he returned home.
Difficult times for Singapore's digital currency
In a report in the Financial Times, top MAS fintech officials have vowed to take an unrelenting stance against bad behavior in the crypto industry.
In response to the increasingly strict countermeasures of MAS, Binance and Bybit recently withdrew from Singapore.
Instead, Crypto.com has been granted a license-in-principle to operate in Singapore. It was also allowed to develop the market in Dubai.
Sopnendu Mohanty, MAS's top fintech officer, said he predicted the central bank's digital currency would be issued within three years. In the last week of June, MAS an institute co-founded to work on the development of CBDCs, looking to draw customers away from digital currency businesses.
