Singapore’s Newly Elected President and His Stance on Cryptocurrencies
Singapore’s newly elected president, Tharman Shanmugaratnam, has recently gained attention from the cryptocurrency community due to his previous remarks about the industry. Despite his skepticism, his role as president is mostly ceremonial, which provides relief to those involved in the crypto space.
Singapore’s President Served as Chairman of MAS for Over a Decade
Before his presidency, Shanmugaratnam made significant contributions to the world of finance and economics. He holds degrees from esteemed institutions such as the London School of Economics, the University of Cambridge, and Harvard University’s Kennedy School of Government. Additionally, he served as the Chairman of the Monetary Authority of Singapore (MAS) from 2011 to 2023, coinciding with his tenure as the Finance Minister of Singapore from 2007 to 2015.
During his time in these positions, Singapore adopted a laissez-faire approach towards cryptocurrencies. Shanmugaratnam asserted that cryptocurrencies and related trading activities did not pose an immediate threat to the country’s financial system, and thus, did not require prohibition. However, his perspective shifted in 2023 when he referred to cryptocurrencies as „inherently purely speculative and slightly crazy“ during the World Economic Forum. While he advocated for maintaining a lack of regulations, he emphasized the need for authorities to provide „ultra clarity“ on the associated risks and warned against unnecessarily regulating such products.
Crypto Regulations in Singapore
Shanmugaratnam has been involved in shaping cryptocurrency regulations in Singapore. In November 2022, he revealed that Singaporean banks were required to maintain $125 in capital for every $100 exposure to cryptocurrencies like Bitcoin and Ethereum. Despite these strict requirements, the exposure of banks to cryptocurrencies represented less than 0.05% of total risk-weighted assets.
In a nod to the future potential of cryptocurrencies, Shanmugaratnam recognized in 2021 that they could extend beyond speculation and illicit finance. He envisioned a future where regulated stablecoins would play a useful role in traditional payment systems. By August 2022, he announced that MAS was actively reconsidering its approach to regulating stablecoins, particularly in response to the collapse of terraUSD (UST), a stablecoin that lost its U.S. dollar peg earlier that year. As a result, MAS released a regulatory framework for stablecoins in August of the same year, reflecting the evolving landscape of cryptocurrency regulation in Singapore.
While it is important to note that Shanmugaratnam’s presidency is mostly ceremonial, his skepticism towards cryptocurrencies and commitment to maintaining a balanced regulatory approach are likely to influence Singapore’s financial policies, including those concerning cryptocurrencies and central bank digital currencies.
