Singapore discourages cryptocurrency trading with new regulations

Singapore has issued new guidelines that limit cryptocurrency trading companies from advertising their services to the public, making it the latest country to bring in new rules to curb virtual currencies.

The Monetary Authority of Singapore (MAS) explained that it has consistently warned that trading cryptocurrencies is highly risky and not suitable for the general public due to the fact that prices are subject to sharp speculative swings.

MAS said it has observed some providers actively promoting their services through online and physical advertisements or through the provision of ATMs in public areas. It said that this could encourage consumers to trade cryptocurrencies on impulse, without fully understanding the risks.

The new guidelines stipulate that cryptocurrency providers may not engage in marketing or advertising of crypto services in public areas, like websites, print media, and social media platforms, or through the engagement of third parties. They may only market or advertise on their own corporate websites, mobile applications, or official social media accounts.

“MAS strongly encourages the development of blockchain technology and innovative application of crypto tokens in value-adding use cases,” said Loo Siew Yee, MAS assistant managing director of Policy, Payments, and Financial Crime.

“But the trading of cryptocurrencies is highly risky and not suitable for the general public. DPT [Digital Payment Token] service providers should therefore not portray the trading of DPTs in a manner that trivialises the high risks of trading in DPTs, nor engage in marketing activities that target the general public.”

Singapore isn’t the only country to bring in new restrictions around cryptocurrency, as earlier this year Kosovo banned the virtual currency in an effort to curb energy consumption following a series of blackouts across the country. Kosovo is currently struggling with what has been called the “worst energy crisis in a decade”, forcing the government to introduce power cuts and a national state of emergency expected to last until late February.

In contrast, China brought new curbs against cryptocurrency mining as well as exchange platforms in May last year, calling it the right time to crack down on mining and trading behaviour. Cryptocurrency miners and exchange platforms were forced to suspend operations as a result. Although the motivations behind the actions weren’t clear, it was suggested the crackdown was part of a wider package of financial measures aimed at fighting instability and illegal activity. The country was also looking to guard against external risk shocks, respond to inflation, and bolster market supervision.