The Monetary Authority of Singapore (MAS), the central bank and the country’s financial regulator, came together to communicate that it was committed to allow the inclusion and marketing of crypto derivatives in approved national exchanges.
For a long time, cryptocurrencies and their community have been fighting hard for the recognition they deserve and, it seems that, finally, the objectives are being achieved in different parts of the world.
Bloomberg published a report, which states that the proposal of the Monetary Authority of Singapore would make the trading of derivatives based on cryptos such as Bitcoin (BTC) and Ethereum (ETH) subject to the Securities and Futures Law. Therefore, as part of the preliminary plans, the MAS has published a consultation document seeking opinions from interested parties.
And, if the central bank continues with this initiative, the crypto derivatives will only be based on “payment tokens”, so it has referred to BTC and ETH.
The MAS also explained that its initiative comes from the interest shown by institutional investors, such as hedge funds and asset managers involved in the sector.
In fact, the report points out that the worldwide BTC derivatives trade sees 5 to 10 billion dollars in volume traded daily; which, obviously, represents an important figure that must be considered.
It is relevant to note that Singapore currently has four approved exchanges: Asia Pacific Exchange, ICE Futures Singapore, Singapore Exchange Derivatives Trading and Singapore Exchange Securities Trading Limited.
On the other hand, one aspect of interest is that, the Central Bank of Singapore has pointed out that crypto derivatives may not be available to all residents of the country. The explanation for this is that the authority considers that the majority of retail investors are not prepared to improve this type of derivatives due to their volatility.
So MAS has explained that his proposal will provide the possibility for crypto exchanges approved in Singapore “to meet the need for investors to manage their exposure to payment tokens while subjecting the activity to regulatory supervision.”
It is evident how Singapore is also looking to join the global race on crypto adoption and the implementation of Blockchain technology. And the reason for this is probably that he has observed how other institutions, such as Bakkt or CME Group, have had significant success.