New MAS measures ban credit and leverage for crypto purchases, reinforcing consumer protection.
In a parliamentary address on 5 March, Minister of State for Trade and Industry and Culture, Community and Youth, Alvin Tan, urged Singaporeans to steer clear of cryptocurrency investments, citing their speculative and volatile nature. As a board member of the Monetary Authority of Singapore (MAS), he underscored that digital assets hold no fundamental value and pose substantial risks to the public.
In response to a parliamentary query from Yio Chu Kang MP Yip Hon Weng on tighter regulations for digital payment token service providers, Mr Tan reiterated MAS’s long-standing stance on cryptocurrency risks. He stated that due to extreme price fluctuations and inherent instability, such assets are unsuitable for most consumers.
As part of a new regulatory framework, MAS has now prohibited digital payment token service providers from extending credit or leverage to retail investors. A significant policy change includes a ban on purchasing cryptocurrencies using locally issued credit cards.
Mr Tan cautioned that buying digital assets on credit equates to borrowing at high interest rates, potentially leading to severe financial losses if crypto prices fall. He also warned that leveraging to invest in cryptocurrencies could result in debt exceeding the initial investment due to market volatility.
While these new measures aim to enhance consumer protection, MAS emphasised that no regulation can entirely shield investors from cryptocurrency risks. The central bank once again urged the public to avoid digital assets, reinforcing that their speculative nature makes them unsuitable for the majority of investors.
The government’s firm stance highlights its commitment to financial stability and responsible investing, with the overarching advice remaining clear—most individuals should refrain from cryptocurrency speculation.
