Singapore's newly elected President Shanmugam: Cryptocurrency is speculative madness, regulation is an endless game

Singapore held its presidential election again after 12 years, with the finance background candidate, Tan Cheng Bock, winning by a large margin. Having worked at the Monetary Authority of Singapore (MAS) for many years, what is his stance on cryptocurrency?

Singapore Holds Presidential Election for the First Time in 12 Years

Singapore recently held its presidential election after 12 years, and 66-year-old former Deputy Prime Minister of Singapore, Tharman Shanmugaratnam, was elected as the ninth President of the country with a 70% vote share. He is set to be sworn in on September 14.

Singapore operates under a parliamentary system where the Prime Minister, who is the leader of the majority party in Parliament, holds executive power. Since 1993, the President has been elected by the people every 6 years to carry out constitutional, ceremonial, and community-related duties and manages the country's reserves as the "second key" holder.

Out of the 5 presidential terms, only 2 have been decided by popular vote in Singapore, while the other 3 were uncontested and directly appointed, including the incumbent President Halimah Yacob who was elected in 2017. The last time Singaporeans voted for their President through an election was in 2011.

Tharman's Stance on Cryptocurrency as a Financial Figure

According to a report by CNA, Tharman has been involved in Singapore's political scene since 2001, serving as a Member of Parliament for five consecutive terms and holding key cabinet positions such as Minister of Education, Minister of Finance, and Deputy Prime Minister. Prior to his political career, he had a long tenure at the Monetary Authority of Singapore (MAS).

As a financial expert, Tharman has been invited to participate in international organizations related to finance and has even served as the Chairman of the International Monetary Fund (IMF), garnering international recognition.

During the 2023 World Economic Forum, Tharman commented on cryptocurrency regulation, stating:

Cryptocurrencies are fundamentally speculative and a bit crazy. If you start playing the regulation game, whether it's ostrich eggs, cryptocurrencies, or anything else, it will be an endless game.

For these unregulated products, he suggested that authorities should provide very clear risk warnings.

As reported by CoinDesk, in November last year when Tharman was still heading MAS, he mentioned that Singaporean banks must hold $125 in capital to cover $100 worth of exposure to cryptocurrencies like Bitcoin or Ethereum. While the banks' exposure to cryptocurrencies was insignificant, accounting for less than 0.05% of total risk-weighted assets, these types of crypto assets still need to adhere to the strictest risk management requirements set by international standard setters.

Singapore's Proactive Regulatory Measures

In October last year, the Monetary Authority of Singapore (MAS) initiated a public consultation on the regulatory framework for activities related to stablecoins and announced the final version of the stablecoin regulatory framework on August 15 this year. Single-currency stablecoin (SCS) issuers must meet criteria related to value stability, capital requirements, redemption ability, and information disclosure to apply for the "MAS-regulated" label. This label aims to help users differentiate between "MAS-regulated" stablecoins and those not bound by MAS regulations.

In July, MAS also introduced new restrictions to protect cryptocurrency investors, requiring relevant platforms to safeguard user assets through trusts and prohibiting the provision of lending and pledging services to retail investors.

As a financial hub in Asia, Singapore not only embraces blockchain technology but also actively legislates to regulate industry players and protect consumers. With the financial background of the newly elected President Tharman, will his tenure bring about any significant impact on related policies?

Examining financial technology innovation through the lens of the five elements, Singapore aspires to become a hub for cryptocurrency assets.