The Monetary Authority of Singapore (MAS) announced it is planning to ease regulations for decentralized exchange in order to facilitate market entry for decentralized exchanges powered by blockchain, reported Coindesk on May 23.
According to a consultation document published on May 22, the MAS explains that the current regulated framework called “recognised market operators” (RMOs) can not meet the demands of the emerging new business models in the trading platform. The solution the MAS proposes to be able to meet the requirements of new technologies would be to “expand the current RMO regime from a single tier to three separate tiers.”
The document stated,
“MAS has observed the emergence of new business models in trading platforms,
including trading facilities that make use of blockchain technology, or platforms that allow peer-to-peer trading without the involvement of intermediaries. As the current RMO regime has been in place since 2002, it is timely to review to the regulatory framework for market operators to ensure that it continues to meet the demands of the changing landscape.”
More specifically, Tier 3 is designated for market operators that are much smaller than big exchanges and it would give them the chance to implement the blockchain technology in a controlled environment.
“This category of market operators could include operators of alternative markets, new entrants that develop solutions for wholesale market participants but do not have an established track record, or market operators that have reached the end of their sandbox tenure and are commercially viable, but whose businesses are not yet developed enough to meet the requirements of the existing RMO regime,” explains the MAS.
The two categories in which the authorities are supervising the current trading market are the recognized market operators (RMOs) and approved exchanges (AE).