Singapore will optimize regulations on crypto capital: public blockchain assets may no longer be uniformly classified as high-risk.

The Monetary Authority of Singapore (MAS) has released a consultation paper proposing a more favorable regulatory capital guideline for the handling of crypto assets on permissionless blockchains (commonly known as public blockchains) before the implementation of the Basel crypto asset capital rules. The Basel crypto asset capital rules reportedly divide 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 permissionless blockchain crypto assets into Group 2, allowing them to be classified as Group 1 crypto assets with lower risk weights and more lenient prudential requirements, provided a series of principled requirements are met. This aims to achieve regulatory technology neutrality. Specifically, banks registered in Singapore must not have their exposure to permissionless blockchain crypto assets classified as Group 1 crypto assets exceeding 2% of their Tier 1 capital, and if such issuance creates liabilities at the bank level, the issuance size must not exceed 5% of Tier 1 capital. (Caixin)