MAS looking to regulate trade of payment token derivatives here, Latest Business News - The New Paper

MAS looking to regulate trade of payment token derivatives here

This article is more than 12 months old

In a consultation paper released yesterday, the Monetary Authority of Singapore (MAS) said it is seeking to allow derivatives of payment tokens such as bitcoin and Ether to be traded on approved exchanges here.

These include Singapore Exchange Derivatives (SGX Derivatives), Asia-Pacific Exchange (APEX) and Ice Futures.

The activity will be regulated under the Securities and Futures Act, The Straits Times reported.

MAS said it had seen interest from institutional investors in trading "payment tokens" like bitcoin and Ether, who "have a need for a regulated product to gain and hedge their exposure to the payment tokens", reported Reuters.

The consultation will close on Dec 20.


Derivatives products are a particular concern for regulators looking to protect investors, and MAS said that it did not consider bitcoin and other similar derivatives to be suitable for trading by retail investors.

"The underlying payment tokens tend to exhibit high volatility and are intrinsically difficult to value...

"Losses also amplified due to the leveraged nature of derivatives, and investors may even lose more than the whole amount they had put in," MAS said.

MAS warned investors it did not regulate token derivatives not traded on approved exchanges, Reuters reported.

Mr David Gerald, president of the Securities Investors Association (Singapore), said in a statement: "The inclusion of these products in the approved exchanges will certainly provide new opportunities for all regulated exchanges.

"This may create liquidity for these products."

But he warned retail investors of the high risk involved in investing in these products.