Singapore's Monetary Authority has released a consultation paper proposing more favorable regulatory capital guidelines for handling crypto assets on permissionless blockchains. According to Odaily, this move comes ahead of the implementation of the Basel crypto asset capital regulations, which categorize crypto assets into two groups. The first group includes tokenized traditional assets and stablecoins, subject to lower capital requirements, while the second group encompasses other crypto assets.
The Monetary Authority of Singapore plans to avoid classifying all permissionless blockchain crypto assets under the second group. Instead, it aims to categorize them as first group assets, provided they meet a series of principle-based requirements. This approach seeks to achieve regulatory neutrality in technology.
For banks registered locally in Singapore, the exposure to permissionless blockchain crypto assets classified as first group assets must not exceed 2% of the bank's Tier 1 capital. Additionally, if such assets result in liabilities at the bank level, the issuance size must not exceed 5% of Tier 1 capital.
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