Despite the growing popularity of cryptocurrency, Singapore isn’t ready to extend crypto trading services to retail consumers anytime soon.
Back in February, DBS chief executive Piyush Gupta said that DBS planned to extend crypto trading services to retail clients by the end of 2022. The bank’s DBS Digital Exchange (DDEx), which launched in 2020, is currently a member-only exchange available to accredited and institutional investors. In 2021, it stood at approximately $1.1 billion in trading volume for the year.
However, Gupta’s position and timeline seemed to change during Thursday’s annual general meeting.
“I don’t think the environment will allow us to make [these services] available to retail consumers anytime in the immediate future,” he said.
Regulatory concerns are (rightfully) in place
As one of the largest lenders in southeast Asia, DBS has also recognized that while crypto usage is growing immensely, especially given the current geopolitical crisis affecting the Ukraine, most regulators still have justifiable concerns about allowing its use in the retail market.
“Left to ourselves, as I have said before, I think over time, digital currencies and crypto assets are going to be pervasive. And therefore, sooner or later, I think the world will have to come to terms with this as an asset class. Not to replace money… but certainly as a store value, I think it will have a role to play,” he said.
Despite that, DBS’ decision to hold back services for retail crypto investors could come from the Monetary Authority of Singapore (MAS). In early January, MAS had issued guidelines to discourage cryptocurrency trading by the general public.
“MAS has consistently warned that trading DPTs is highly risky and not suitable for the general public, as the prices of DPTs are subject to sharp speculative swings,” it noted. Despite DDEx holding a market license, it doesn’t seem to be the right time for the exchange to work against the regulator’s commentary.
Gupta has often argued that central banks will have to eventually look at regulating the crypto sector. Indeed, Singapore has become a crucial hub that has handed out several crypto licenses to both domestic and international players.
This month alone, MAS gave in-principle approval (IPA) to two fintech firms – Digital Treasures Center (DTC) and Hodlnaut, which will allow both firms to offer cryptocurrency services under the Payment Services Act.
Prior to that, Paxos and Swiss crypto bank Sygnum received a stamp of approval from the regulator to expand its crypto offerings throughout Singapore. While Singapore’s actions demonstrate its open arms towards crypto businesses, it is still maintaining the position of implementing stringent guidelines to help safeguard retail consumers.
But, will DBS open for the general public in the future?
“I’m not holding my breath,” Gupta answered.