In a recent move, the Monetary Authority of Singapore (MAS) confirmed that it will not permit listing spot Bitcoin (BTC) ETFs for retail investors on local exchanges. This decision aligns with Singapore’s current regulatory framework, which does not recognize cryptocurrencies like Bitcoin as suitable assets for Exchange-Traded Funds (ETFs). This development was reported following a statement from Lianhe Zaobao, a local news outlet.
The MAS’s decision is anchored in the speculative and highly volatile nature of cryptocurrency trading, underscoring the risks that these assets may pose to retail investors. A spokesperson for MAS highlighted the stringent regulations governing collective investment schemes (CIS) under the Securities and Futures Act. Currently, these regulations exclude digital payment tokens (DPT), including Bitcoin, from being eligible assets in retail CIS in Singapore.
US and Singapore diverge on Bitcoin ETFs
Despite this limitation in the Singapore market, retail investors are not left without options. Licensed capital market intermediaries in Singapore, authorized by the MAS, can provide access to spot Bitcoin ETFs listed in other countries. These intermediaries are mandated to ensure comprehensive risk disclosure and perform thorough client suitability assessments. This process is designed to safeguard retail investors’ interests while allowing them some exposure to these investment products.
Singapore’s Retail investors are individuals not classified as qualified or institutional investors under the Securities and Futures Act. The MAS’s stance reflects a cautious approach, emphasizing investor protection, especially in the face of the volatile nature of cryptocurrency markets.
In contrast to Singapore’s conservative approach, the United States has adopted a more open stance regarding Bitcoin spot ETFs. The US Securities and Exchange Commission (SEC) approved listing 11 spot Bitcoin ETFs, a move that marked a significant development in the cryptocurrency investment landscape. Prominent players in the ETF market, including BlackRock, Fidelity, Invesco, and Ark Invest, have partnered with Swiss Crypto 21Shares to launch these ETFs.
These ETFs have experienced considerable trading volumes since their inception. Notably, Grayscale Investments’ Grayscale Bitcoin Trust, which transitioned into an ETF, set a record for the highest first-day trading volume in history, exceeding $2.3 billion. Similarly, BlackRock’s iShares Bitcoin Trust witnessed a trading volume surpassing $1 billion, indicating a robust market interest in these products.
Global regulatory perspectives
The stance the MAS and the SEC take reflects the divergent regulatory approaches towards cryptocurrencies worldwide. While Singapore maintains a cautious and protective stance for its retail investors, the US market embraces these new investment vehicles more. This divergence underscores the evolving nature of global financial markets and the varying risk tolerance levels across different regulatory environments.
The crypto market continues to be an area of intense regulatory focus worldwide. For example, the Hong Kong Monetary Authority recently initiated a public consultation to explore regulatory measures for the crypto industry, aiming to enhance investor protection and curb speculative trading in cryptocurrencies.
