The Monetary Authority of Singapore has sent a questionnaire to some applicants and holders of its digital-payments license seeking highly granular information about their business activity and holdings, the people said, asking not to be identified as the process isn’t public. The questions, which were sent over the last month, focus on gauging the financial soundness of the firms and their interconnectedness, they said, with some adding they’re expected to respond promptly.
The moves come ahead of anticipated changes to crypto regulation in the city-state, where authorities are grappling with encouraging innovation on the one hand, while limiting the fallout from collapsing firms and retail investors getting burnt by the volatility in the market. MAS managing director Ravi Menon will seek to address these tensions next week, and has already put the industry on notice that the scope of regulations will be broadened to cover more activities.
So far, the regulator has awarded more than 10 permits to crypto firms who have applied to provide digital payment token services in Singapore, a fraction of almost 200 applicants.Singapore was early to study blockchain technology and tout its ambitions as a crypto hub. But the recent defaults of several entities with key operations in the city-state have thrust its regulatory regime for crypto into the spotlight.
"It is possible that measures under consideration include requirements for MAS-regulated firms to obtain collateral when lending crypto, to conduct due diligence on their counterparties and to comply with liquidity and risk-based capital rules – similar to the requirements which financial institutions in traditional capital markets are subject to.”