Singapore banking regulation is here!

By Crypto4you23 | Cryptoanswers22 | 27 Oct 2022



Everyone knows the importance of Asia in the world economy.
Many countries depend on China, Japan and Singapore is not different.
In this article we will understand how the regulation that this Asian country is doing with bank loans works and how it can help in the digital economy of the Web 3


What's happening?


Singapore's regulatory authorities are concerned about the rise in personal loans. However, the regulator is only concerned about loans used to buy cryptocurrency, not all loans.

Based on this, the Monetary Authority of Singapore made the decision to take action and published a document for public consultation that, among other things, forbids borrowing for this reason.

"Cryptocurrency prices are extremely erratic, and using leverage exposes customers to significant losses.

As a result, ordinary investors shouldn't buy tokens using credit cards or other forms of credit, according to the document.

Furthermore, it has been made clear by the Monetary Authority that it intends to outlaw the staking of digital assets. The document that was submitted claims that regulators seek to restrict businesses from using assets put in their processes to generate profits.


What's more?


The use of retail investor custody tokens for loans or income guarantees will be prohibited if the proposal is passed into law.

Staking and other DeFi protocols, many of which are headquartered in Singapore, would be derailed as a result.

The treaty also stipulates that stablecoins must have their "peg" (parity) in the local currency or a G-10 currency.

Stablecoins must be properly collateralized, according to the Monetary Authority's subsequent determination in the document. In other words, these coins must be totally minted from reserve assets of the same value.

In Singapore, this norm essentially outlaws all stablecoins. Stablecoin issuers will also be subject to minimum capital restrictions.

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