The central bank clarified that while respondents opposed the restriction, MAS is worried about the risks based on recent collapses of crypto lending and staking programmes involving retail customers worldwide.
The Monetary Authority of Singapore’s (MAS) restriction on Digital Payment Token (DPT) service providers from facilitating lending and staking cryptocurrencies for their retail customers may significantly challenge certain crypto entities, especially those with these as their primary product offering.
Staking enables investors to lend cryptocurrencies to developers for blockchain network operations. In its October 2022 consultation paper, MAS highlighted that advertised yields for these products are often significantly higher than those in traditional finance, despite potential uncertainties, unsustainability, or outright fraud in the underlying revenue sources.
