According to a recent press release from the Monetary Authority of Singapore (MAS), the country might be on its way to approving the trading of crypto derivatives on trading platforms. The release states that the MAS is “proposing to allow payment token derivatives” to be traded with regulation from the already existing Securities and Futures Act (SFA).
The MAS is concerned because the international institutional investors interested in the cryptocurrency sector have increasingly noted their need for a properly regulated product to trade with, if they are to make a significant enough play into the market.
“MAS’ 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 agency however warns that the cryptocurrency derivative products are not the best options for most retail investors because these tokens “have little or no intrinsic value, are difficult to value, and exhibit high price volatility.”
So far, the country has four fully-regulated exchange platforms including the Singapore Exchange Securities Trading Limited, ICE Futures Singapore, Singapore Exchange Derivatives Trading and the Asia Pacific Exchange. Regardless, cryptocurrencies do not currently qualify for assets that can form the basis for a derivative product. MAS is now currently considering changing this, due to unignorable demand from interested parties.
A few months ago, Singapore’s revenue authority also published a guide draft for goods and services tax (GST) towards crypto transactions.
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