February 16, 2022
By Tsering Namgyal
Singapore does not currently regulate non-fungible tokens (NFTs) and they are not suitable for retail investors like other digital tokens, said Mr. Tharman Shanmugaratnam, senior minister and minister in charge of the Monetary Authority of Singapore (MAS).
He was responding to a question raised in the parliament by Do Wee, a member of parliament (MP) with regards to whether MAS has any plans to regulate activities in relation to non-fungible tokens.
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“MAS does not and cannot possibly regulate all things or products that people choose to invest their money in. We consider the substance of an asset when assessing whether a product or activity should come under MAS’ regulatory remit,” the response said.
“MAS does not currently regulate NFTs given the nature of their underlying assets, such as the few examples earlier. This is also the stance taken by most other leading jurisdictions,” he said.
MAS currently takes a tech-neutral stance and looks at the “underlying characteristics of the token to determine if the token should be regulated by the MAS.
“For example, should an NFT be structured to represent rights to a portfolio of listed shares, it will like other collective investment schemes be subject to prospectus requirements, licensing and business conduct requirements,” it said.
Further, MAS would like to “remind consumers that investments in digital tokens, including NFTs, are not suitable for retail investors.”
Investors might suffer major losses while investing in speculative assets such as NFTs which has “significant legal complexities and risks involved in NFTs, Shanmugaratnam replied.
MAS continues to monitor developments in the digital token space, including NFTs, it said.
About the author
Tsering Namgyal is the chief content officer of Blockchain Asset Review.
