Singapore Might Restrict Retail Access To Cryptocurrencies: Central Bank

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These measures are meant to reduce consumer risk while trading in such volatile assets.

Singapore's central bank Monetary Authority of Singapore is contemplating adding frictions on retail access to cryptocurrencies through various measures including customer suitability tests and restricting the use of leverage and credit facilities for such trading.

These measures are meant to reduce consumer risk while trading in such volatile assets.

The main concern regarding cryptocurrencies is that prices of such assets are highly volatile, driven largely by speculation rather than any underlying economic fundamentals, Ravi Menon, Managing Director at the Monetary Authority of Singapore said in his opening remarks at the Green Shoots Seminar on Monday.

It is very risky for the public to put their money in such cryptocurrencies, as the perceived valuation of these cryptocurrencies could plummet rapidly when sentiments shift, Menon said.

However, the Monetary Authority of Singapore feels a complete ban on retail access to cryptocurrencies is not likely to work.

"The cryptocurrency world is borderless. With just a mobile phone, Singaporeans have access to any number of crypto exchanges in the world and can buy or sell any number of cryptocurrencies," Menon said.

The extreme price volatility of cryptocurrencies rules them out as a viable form of money or investment asset, Menon added.

He said safeguarding consumers from harm requires a multi-pronged approach and not just regulation by the Singapore central bank.

"First, global cooperation is vital to minimise regulatory arbitrage. Cryptocurrency transactions can be conducted from anywhere around the world. MAS is actively involved in international regulatory reviews to enhance market integrity