A crypto lobbying group based in Singapore has voiced its opposition to the proposal from the central bank to prohibit crypto firms from lending crypto tokens.
Singapore’s central bank published consultation papers on October 26 and suggested prohibiting providers of digital payment token services from providing customers with “any credit facility,” including both fiat currency and cryptocurrencies.
The Blockchain Association of Singapore (BAS) thinks it might be too limiting, though. According to reports, BAS claimed in a feedback letter to the Monetary Authority of Singapore (MAS) that a blanket ban might encourage cryptocurrency users to lend their tokens to unregulated, offshore companies.
The income that users get from lending is one of the key factors drawing users to the practice, according to BAS, which also highlights one of the main motivations for cryptocurrency ownership supports a more controlled and targeted approach in place of a blanket prohibition, according to board chairman Chia Hock Lai in a statement to Bloomberg.
This involves emphasizing consumer education regarding the dangers of working with unreguated entities. According to the chairman:
”The proposed measure, while well-intended, might have unintended consequences if implemented in its entirety, including leading consumers to move towards unregulated services providers”
BAS further claimed that a total ban on businesses giving incentives to retail customers is “too severe” and proposed an alternative method of permitting presents unrelated to monetary purchases.
A string of crypto-related scandals in the nation, including those involving the Three Arrows Capital (3AC) hedge fund, the cryptocurrency platform Vauld, and the cryptocurrency lender Hodlnaut, were in the news when MAS released its consultation paper in October 2022.
In other news, Zhu Su and Kyle Davies, the creators of 3AC, were recently served with a Twitter subpoena. Regardless of whether the information was with the two themselves or a third party, they were required to turn up any documents they had.
