Singapore to Optimize Crypto Capital Regulation: Public Chain Assets May No Longer Be Uniformly Classified as High-Risk

Odaily News According to a consultation paper released by the Monetary Authority of Singapore (MAS), a more favorable regulatory capital guideline is proposed for the treatment of crypto assets on permissionless blockchains (commonly referred to as public chains) before the implementation of the new Basel crypto asset capital rules. It is reported that the Basel crypto asset capital rules classify crypto assets into two groups. Group 1 includes tokenized traditional assets and stablecoins, subject to lower capital requirements. Group 2 includes crypto assets that do not meet the above conditions. The MAS intends to abandon the practice of uniformly classifying crypto assets on permissionless blockchains as Group 2 assets. Instead, it will allow them to be classified as Group 1 crypto assets, which carry lower risk weights and more lenient prudential requirements, provided they meet a series of principle-based requirements. This aims to achieve regulatory technology neutrality. The specific provisions are as follows:

For banks incorporated in Singapore, their exposure to permissionless blockchain crypto assets classified as Group 1 must not exceed 2% of the bank's Tier 1 capital. Furthermore, if the related issuance constitutes a liability at the bank level, the issuance size must not exceed 5% of Tier 1 capital. (Caixin)