Monetary Authority of Singapore Allows Crypto-Based Derivatives on Approved Exchanges

The Monetary Authority of Singapore (MAS), the country’s de-facto central bank, may soon permit crypto-based derivatives to be exchanged on regulated platforms.

The MAS published a consultation paper on November 20, looking to green-light what it dubs “payment token derivatives” for listing and exchanging on “approved exchanges” in the nation under its Securities and Futures Act (SFA).

The proposal comes as a reaction to request from international institutional investors for regulated products to have the option to hedge their exposure to payment tokens like bitcoin (BTC) and ether (ETH), the office said.

Singapore presently has four endorsed exchanges—Asia Pacific Exchange, Singapore Exchange Derivatives Trading, ICE Futures Singapore, and Singapore Exchange Securities Trading Limited, as indicated by MAS.

Payment tokens like bitcoin and ether are presently not classified as an underlying asset for a derivative product under the supervision of the SFA. Nonetheless, MAS stated it had gotten solicitations to take care of such resources under its regulatory remit for them to be listed on approved platforms.

The move comes only days after a news report that Bakkt, the bitcoin futures market introduced by New York Stock Exchange owner ICE, is growing its physically-settled bitcoin futures product in Asia, making it accessible for trading on ICE Futures Singapore.

On the other hand, MAS stated such payment tokens derivatives are “not suitable for most retail investors” as they have “little or no intrinsic value” with high volatility in price.

The consultation paper is open for comments from interested individuals until December 20.