The feedback was given in response to a proposed ban by the Monetary Authority of Singapore published back in October.
A crypto lobbying group based in Singapore has voiced its opposition to the proposal from the central bank to prohibit crypto firms from lending crypto tokens.
On Oct. 26, Singapore’s central bank issued consultation papers and proposed to ban digital payment token service providers from offering “any credit facility” to consumers. This includes either lending fiat or cryptocurrencies. However, the Blockchain Association of Singapore (BAS) believes that this may be overly restrictive.
In a feedback document sent to the Monetary Authority of Singapore (MAS), BAS reportedly argued that a blanket ban could push crypto users to pursue lending their tokens to offshore firms that are unregulated. BAS also highlighted that one of the main things that attract users to lending is the interest that they earn, which the association argues to be one of the reasons people hold crypto.
In a statement to the mainstream media outlet Bloomberg, BAS board chairman Chia Hock Lai said that instead of a blanket ban, they are proposing an approach that is more measured and targeted. This includes focusing on the education of consumers when it comes to the risks of using entities that are unregulated. The chairman explained:
“The proposed measures, while well-intended, might have unintended consequences if implemented in its entirety, including leading consumers to move towards unregulated service providers.”
In addition, BAS also argued that a complete ban on companies providing incentives to retail customers is “too draconian” and suggested a different way of allowing gifts not connected to financial purchases.
The consultation paper issued by MAS in October last year came in the midst of a series of crypto debacles in the country including the Three Arrows Capital (3AC) hedge fund and crypto platforms Vauld and crypto lender Hodlnaut.
In other news, 3AC founders Zhu Su and Kyle Davies were recently subpoenaed via Twitter. The duo was ordered to provide documents in their possession, wher the information is with them or with a third-party.