Singapore May Allow Crypto Derivatives on Approved Exchanges

The Monetary Authority of Singapore (MAS) wants to approve the listing and trading of cryptocurrency derivatives, but, only on certain accepted crypto exchanges in the country. 

As Bloomberg reported on Wednesday, MAS, the country’s financial regulator proposed the development in response to the interest from asset managers and hedge funds dealing on such products.

The regulator suggested in a statement that the trading of derivatives on common digital currencies like Bitcoin (BTC) and Ether (ETH) should be under the Securities and Futures Act.

“MAS’s proposal will allow approved exchanges in Singapore to meet the need of investors to manage their exposure to payment tokens while bringing the activity under regulatory oversight,” the regulator said.

According to the report, the regulator doesn’t plan to include crypto derivatives that are not enlisted on the approved domestic exchanges.

For instance, two of the approved venues; Asia Pacific Exchange and Singapore Exchange Derivatives Trading Ltd., a local unit of Atlanta-based ICE, do not offer digital currency and cash-settled Bitcoin futures like Bakkt and CME Group. Hence, such products are not approved by the MAS.

In addition to that, the Monetary Authority proposed a 50% minimum margin requirement for retail investors.

The idea is purported to mitigate the exposures associated with payment tokens for investors, as the MAS already noted that crypto derivatives are “not suitable,” especially for the retail investors. 

Conclusively, the MAS noted in a consultation paper on this matter, that, “Retail investors are strongly advised not to trade in payment token derivatives, and even if they choose to do so, should exercise utmost caution.” 

In another development reported by Coinfomania, the MAS recently partnered with the United States-based JPMorgan Chase and Temasekan investment firm to debut a blockchain-based prototype to enable a secure, faster, and cheaper cross-border payments in the country.

NordFX