Meteoric rise in the price of bitcoin and other crypto-currencies forced the Central Bank of Singapore to publish an official warning from investing in cryptocurrency.
On December 20 in its report, the Monetary authority of Singapore (MAS) urged people to “act very carefully and understand significant risks” associated with investing in cryptocurrency.
The report stated:
“MAS is concerned about the possible involvement of the citizens in investing in cryptocurrencies such as bitcoin, due to the recent increase in their prices.”
Cryptocurrency like bitcoin is not recognized as legal tender, as emphasized by the Central Bank and financial regulator, adding that it does not regulate the cryptocurrency.
“MAS believes that the recent sharp rise in the prices of cryptocurrencies caused by speculation,” added authority, thereby joining a series of similar comments by Central banks around the world.
“The risk of a sharp decline in prices high,” added the Central Bank, citing price fluctuations. “Cryptocurrency investors should understand that they risk losing all their capital.”
Singapore as a major financial and technological center through the Central Bank released a digital Singapore dollars on the basis of private Ethereum blockchain within “the Ubin Project” – ongoing initiatives for otsyrevanija Fiat currencies through blockchain technology. In his warning Central Bank stressed that, despite the traditional open to advanced technologies course, most cryptocurrency trading platforms are not based in the city-state. “Since most of the operators of the platforms used for trading cryptocurrencies, you do not have presence in Singapore, it made it difficult to verify their validity and reliability,” – said the financial body, putting on a “huge fraud” in the interaction with the platforms that are supported by foreign operators.
The Central Bank also reminded investors that cryptocurrency investments they will not have insurance or security. In mid-November, the Central Bank has published recommendations on the initial public coin (ICO) and their application in the context of laws on securities.
Today’s report somewhat contradicts the recent remarks of the managing Director of the Central Bank, who stated that to the regulation of the cryptocurrency will not be bias. In fact, the head of the Central Bank of Ravi Menon said that bitcoin “does not create a risk that requires regulation,” but it creates mediators and activity around the crypto currency.