MAS: “Insignificant Exposure” to Crypto at Singapore Banks

“Keep calm and carry on” is the message from MAS this week. In a series of parliamentary questions related to the crypto field on 1 August 2022, MAS chairman Tharman Shanmugaratnam addressed concerns posed to the government.

In one question, Senior Minister Shanmugaratnam was asked about the extent of Singaporeans’ exposure to the collapse of Terra.

Shanmugartnam responded by saying the TerraUSD’s collapse “illustrates the high risks involved in investments in cryptocurrencies that MAS has warned the public about repeatedly.”

Reassuring contagion is limited, he added that data from MAS shows Singapore banks “have insignificant exposures to the cryptocurrency ecosystem.”

MAS also reminded that stablecoins and cryptocurrencies are considered digital payment tokens (DPT) under the Payment Service Act. “The regulatory regime for DPT services under the Act primarily targets money laundering / terrorism financing and technology risks,” Shanmugartnam said.

In a questions related to DPT service providers, Shanmugaratnam said those licensed in Singapore have not been affected too badly. “The impact of the cryptocurrency market on the six DPT service providers licensed under the Payment Services Act has also been limited,” he said.

“MAS is evaluating the financial condition of the DPT service providers that had submitted licence applications.”

Shanmugaratnam also called for “broad regulatory consistency globally on rules to preserve market integrity, investor protection and financial stability,” adding that MAS is involved in “international regulatory discussions.”

“Domestically, MAS is also enhancing our regulatory framework, and will be consulting on the proposed measures in the next few months.”