Singapore Proposes Regulatory Boost for Decentralized Exchanges

Singapore's central bank is proposing a change to existing exchange market rules aimed to ease blockchain adoption and decentralization.

AccessTimeIconMay 23, 2018 at 8:15 a.m. UTC
Updated Sep 13, 2021 at 7:58 a.m. UTC

The Monetary Authority of Singapore (MAS), the city-state's de facto central bank, is proposing changes to existing regulations that would ease market entry for blockchain-based decentralized exchanges.

According to a consultation paper published on Tuesday, MAS states that the current single-tier "recognized market operators" (RMO) regulatory framework is not able to meet demand for new business models based on such emerging technologies. To address the issue, the authority proposes to introduce a three-tier structure in an attempt to ease market access for small-scale exchange platforms.

"MAS has observed the emergence of new business models in trading platforms, including trading facilities that make use of blockchain technology, or platforms that allow peer-to-peer trading without the involvement of intermediaries," the MAS writes in the paper, adding:

"As the current RMO regime has been in place since 2002, it is timely to review to the regulatory framework for market operators to ensure that it continues to meet the demands of the changing landscape."

In particular, tier 3 of the proposed framework applies to market operators that are significantly smaller than established exchanges and is intended allow them to implement blockchain and P2P technology and roll out services in a supervised environment.

"This new tier is designed to facilitate new entrants that develop solutions for wholesale market participants, or market operators that have reached the end of their sandbox tenure and are commercially viable, but whose businesses are not able to meet the requirements of the existing RMO regime," MAS explained.

Currently, the authority supervises the exchange market under two categories: approved exchanges (AE) and the recognized market operators (RMOs). The former applies to "systemically-important" platforms that are available to retail investors such as Singapore's stock exchange.

The RMO framework, on the other hand, allows regulation of other exchanges such as those for commodities and derivatives trading, which would fall under the new proposal's tier 2, if the proposal is enacted.

Interested parties such as financial institutions now have until June 22 to provide MAS with feedback on the proposal.

MAS image via Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.