In a move to disengage the public from trading in cryptocurrencies, Singapore’s central bank on Monday issued new guidelines that prohibit crypto firms from promoting their services and products to the public.
According to the new guidelines issued by the Monetary Authority of Singapore (“MAS”), which take effect immediately, DPT (Digital Payment Token) service providers will not portray the trading of DPTs in a manner that trivialises the high risks of trading in DPTs, as well as not promote their DPT services in public areas in Singapore or through any other media directed at the general public in Singapore.
This includes placing of any form of advertisements or promotional materials in public areas such as Singapore public transport, public transport venues, broadcast media or any newspaper and magazine, third party websites, social media platforms, public events or roadshows.
However, DPT service providers may promote their services on their own corporate website, mobile applications, or official social media accounts, but must not trivialise the risks of trading in DPTs in a manner that is inconsistent with or contradicts the risk disclosures under the PS (Payment Services) Act.
Further, DPT service providers should also not engage third parties, such as social media influencers or third-party websites, to promote their DPT services to the general public in Singapore. This includes joint promotional campaigns to solicit new customers.
Besides prohibiting public crypto advertisements, the regulator also intends to bar the use of automated teller machines (“ATMs”) from operating within the country, as it is a form of promotion of DPT services to the public.
“Such convenient access may mislead the public to trade in DPTs on impulse, without considering the risks of trading in DPTs. DPT service providers should not provide physical ATMs in public areas in Singapore to facilitate public access to their DPT services,” MAS said.
“MAS strongly encourages the development of blockchain technology and innovative application of crypto tokens in value-adding use cases. But the trading of cryptocurrencies is highly risky and not suitable for the general public,” Loo Siew Yee, MAS Assistant Managing Director for Policy, Payments, and Financial Crime, said.
“DPT service providers, therefore, should not portray the trading of DPTs in a manner that trivialises the high risks of trading in DPTs or engage in marketing activities that target the general public.”
In a statement, MAS said that it has “consistently warned that trading DPTs is highly risky and not suitable for the general public, as the prices of DPTs are subject to sharp speculative swings.”
Despite the new guidelines, the Singapore Fintech Association (SFA) and the SFA Payments Group (SFA-PG) are hopeful about the future of crypto in Singapore, saying that it is proof that Singapore “continues to see blockchain and cryptocurrencies as innovations that have the potential to gain mass adoption. It is imperative that such adoption is balanced with pragmatic guardrails and a system of consumer protections aiming to create a more sustainable market environment.”