Singapore’s Leading Crypto Group Opposes Proposed Ban on Lending Tokens

The main crypto lobby group in Singapore has pushed back proposals from the central bank to ban crypto companies from lending digital tokens to retail customers, Call it "too restrictive". 

Blockchain Association of Singapore said such a blanket ban could instead push people to seek out unregulated offshore firms to lend their tokens to, according to an 11-page feedback that was sent late last month to the Monetary Authority of Singapore and viewed by Bloomberg News. 

The paper did not agree on aspects such as the provision of retail incentives, though it accepted such suggestions as the prohibition on customers borrowing to purchase crypto tokens and the separation of company customers' assets. 

On the question of loan tokens, the association stated that this allows clients to earn interest, which is one of the attractions of holding digital payment tokens. Singapore Central Bank has a suite of stricter measures in place to close out retail clients in the volatile cryptocurrency market, This includes not allowing companies to lend or stake their coins to generate returns and not allowing individuals to borrow to finance chip purchases.

Our approach is more measured and focused, including doubling on educating consumers on the risks of dealing with unregulated entities and increasing enforcement activities on those engaging in regulated activities without the requisite regulatory approvals,” chia hock lai, Chairperson of the Board of Directors of the Association, in response to a request for comments from Bloomberg regarding the document. 

The MAS consultation document in October came in response to a series of high-level crypto explosions in the city-state, including the Three Arrows Capital hedge fund and the Vauld and Hodlnaut rigs. Since then, the collapse of ftx and its entities has exposed the risks of inadequate regulation and protecting customers, allegations of misconduct, including the merger of billions of dollars' worth of client funds, have come to public attention. 

"The proposed measures, although well-intentioned, could have unintended consequences if fully implemented, including encouraging consumers to turn to non-regulated service providers," chia said. Feedback at the mas took into consideration feedback from 180 people who attended a seminar organized by the association in November, according to the document.  

The group also disapproved of the imposition of a comprehensive ban on companies that encourage retail customers, describing the proposal as "too draconian".  It proposes a more nuanced approach to enable gifts that are not related to financial purchases, such as door gifts during tours.   

— Using Andrea Tan's help.