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.
On Oct. 26, Singapore’s central bank issued consultation papers and proposed banning digital payment token service providers from offering “any credit facility” to consumers, including both fiat and cryptocurrencies. However, the Blockchain Association of Singapore (BAS) believes it may be overly restrictive.
In a feedback document sent to the Monetary Authority of Singapore (MAS), BAS reportedly argued that a blanket ban could push crypto users to pursue lending their tokens to offshore firms that are unregulated. BAS also highlighted that one of the main things attracting users to lending is the interest that they earn, which the association argues is one of the reasons people hold crypto.
In a statement to Bloomberg, BAS board chairman Chia Hock Lai said that instead of a blanket ban, BAS proposes an approach that is more measured and targeted. This includes focusing on educating consumers on the risks of using unregulated entities. The chairman explained:
“The proposed measures, while well-intended, might have unintended consequences if implemented in its entirety, including leading consumers to move towards unregulated service providers.”
In addition, BAS also argued that a complete ban on companies providing incentives to retail customers is “too draconian” and suggested a different way of allowing gifts not connected to financial purchases.
The consultation paper issued by MAS in October 2022 came in the midst of a series of crypto debacles in the country, including those involving the Three Arrows Capital (3AC) hedge fund, crypto platform Vauld and crypto lender Hodlnaut.
In other news, 3AC founders Zhu Su and Kyle Davies were recently subpoenaed via Twitter. The two were ordered to provide documents in their possession, whether the information was with them or a third party.