Singapore may allow cryptocurrency derivatives trading on regulated exchanges

Singapore may allow cryptocurrency derivatives trading on regulated exchanges

The monetary authority of Singapore (MAS) may soon allow trading in cryptocurrency derivatives on regulated platforms.

On Wednesday, MAS published
a reference document that suggests allowing the listing and trading of “payment token derivatives on approved exchanges” in accordance with the securities and futures Act (SFA).

The Agency stated that this offer will be a response to the demand for regulated products from international institutional investors, and will provide an opportunity to hedge risks when interacting with cryptocurrencies. There are currently four regulatory-approved exchanges operating in Singapore: Asia Pacific Exchange, ICE Futures Singapore, Singapore Exchange Derivatives Trading and Singapore Exchange Securities Trading Limited.

Payment tokens, as MAS calls THEM, such as bitcoin and ether, are not classified as underlying assets for derivatives products under SFA control. However, MAS says it has received requests to include such assets in its regulatory authority for listing on regulated sites.

Last week, the Bakkt trading platform announced that it plans to expand its offerings and add settlement futures contracts for bitcoin, which will be offered through the company’s clearing center in Singapore (ICE Clear Singapore), and traded on ICE Futures Singapore.

Meanwhile, MAS said that such derivatives are “not suitable for most retail investors” because they have “little or no intrinsic value” with high price volatility. The regulator accepts feedback and suggestions for making changes to the reference document until December 20.