On 5 March 2025, the Monetary Authority of Singapore (MAS) published an Oral Reply to Parliamentary Question on the tightening of regulations for digital payment token service providers, delivered by Mr. Alvin Tan, Minister of State, Ministry of Trade and Industry and Ministry of Culture, Community and Youth, and Board Member of MAS, on behalf of Mr. Gan Kim Yong, Deputy Prime Minister and Minister for Trade and Industry, and Chairman of MAS. The statement was made in response to a parliamentary question by Mr. Yip Hon Weng, MP for Yio Chu Kang SMC, who inquired about the Government’s considerations in tightening these regulations and their anticipated impact on younger consumers aged 18 to 25, who are increasingly adopting cryptocurrency use.
While the Singapore Government stating that digital assets are speculative and high-risk, it discusses the dangers of using credit or leveraged funds for such investments. Borrowing money to purchase cryptocurrencies can lead to greater financial losses, especially given their volatility. Mr. Alvin Tan explained that “if an individual uses his credit card to purchase cryptocurrencies, he could be borrowing from the credit card, which attracts a higher rate of interest than other forms of credit. If the value of the cryptocurrency falls, he may suffer substantial losses and be unable to pay off his credit card debt, with the higher rate of interest compounding his debt.” To mitigate these risks, MAS has restricted digital payment token service providers from offering credit or leverage to retail customers of any age, including prohibiting the use of credit cards for cryptocurrency transactions.
Mr. Alvin Tan, Minister of State, Ministry of Trade and Industry and Ministry of Culture, Community and Youth, and Board Member of MAS, on behalf of Mr. Gan Kim Yong, Deputy Prime Minister and Minister for Trade and Industry, and Chairman of MAS. further stated, “using credit or leverage magnifies losses, and investors can lose more than the principal amount they put in,” reinforcing the authority’s rationale for imposing stricter regulations to maintain financial stability and protect retail investors from high-risk financial exposure. Acknowledging this, Mr. Alvin Tan cautioned that “regulatory measures cannot insulate consumers from losses associated with the inherently speculative and highly risky nature of cryptocurrencies.”
