The Monetary Authority of Singapore (MAS) will delay the rollout of new cryptoasset capital rules for banks to at least 2027, following industry feedback calling for more time and global coordination.
The decision comes after MAS sought comments earlier this year on amendments to the capital and liquidity frameworks for Singapore-incorporated banks to align with Basel Committee standards on the treatment and disclosure of cryptoasset exposures.
Respondents supported the framework but warned that implementing it ahead of other jurisdictions could lead to regulatory arbitrage.
Several also called for flexibility in treating assets on permissionless blockchains, which would otherwise fall under Group 2 with a 1250% risk weight.
MAS said it will continue to monitor global regulatory developments and advances in blockchain technology before setting a final implementation date.
Until then, banks must consult MAS and apply prudential treatment largely aligned with the consultation paper.
Separately, new rules for Additional Tier 1 (AT1) and Tier 2 capital instruments will take effect on 1 January 2026.
These instruments can only be issued to non-retail investors in Singapore, though the restriction applies only at issuance.
Banks must include clauses in agreements with intermediaries prohibiting retail sales, while MAS has reminded intermediaries not to distribute or facilitate retail access to such instruments.
MAS reiterated that AT1 and Tier 2 instruments are complex and high-risk, and generally unsuitable for retail investors.
Instruments issued before 2026 will continue to qualify as regulatory capital under a grandfathering arrangement with no expiry, provided they meet other requirements under MAS Notice 637.
The regulator will also proceed with clarifications to Notice 637, including updates on capital buffers and credit risk mitigation under synthetic securitisations.
Featured image: Edited by Fintech News Singapore, based on image by vector_lovers via Freepik
