Unverified success tales, celebrity endorsements, and the fear of missing out (FOMO) on strong returns are some of the factors that drive speculative crypto trading, according to MAS.
The Monetary Authority of Singapore (MAS) has responded to comments made on its planned Digital Payment Token (DPT) rules by imposing further restrictions on DPT service providers in an effort to curb cryptocurrency investment speculation.
Five ways DPT service providers may assist retail consumers prevent pricing speculating were revealed by MAS, the de facto central bank of Singapore. Before providing crypto services, DPT providers should ascertain their customers’ level of risk awareness. It was also recommended that DPT service providers not incentivize cryptocurrency trading. Thirdly, financing, margin, or leveraged trades are not offered by DPT service providers.
Another policy that MAS hopes would deter speculation in crypto investments is the refusal to accept locally issued credit card payments. Finally, your cryptocurrency assets will not factor into your net worth calculation. Ho Hern Shin, MAS’s deputy managing director (financial supervision), made the following statement on the decision:
“These consumer access and business conduct measures can help achieve this goal, but they won’t protect customers from the losses that come with cryptocurrency trading, which is very risky and speculative.”
The MAS claims that celebrity endorsements, unconfirmed success stories, and the fear of losing out on high returns contribute to the “significant risks and consumer harms” associated with speculative cryptocurrency trading.
To explore different applications of asset tokenization, the Singaporean central bank expanded Project Guardian on November 15 to include five more industry pilots.
Tokenized financial assets and apps will be hosted via an open digital infrastructure, which MAS is investigating with the introduction of Global Layer One, one of five projects.
Also Read: Jim Cramer Recommends That His Audience “Just Buy Bitcoin”
Wallets