Singapore’s recently elected president, Tharman Shanmugaratnam, previously characterized cryptocurrency as “intrinsically speculative and somewhat unconventional.”
Shanmugaratnam secured a decisive victory with 70.4% of the vote, making him Singapore’s ninth president and succeeding Halimah Yacob, who was the nation’s inaugural female head of state.
Nevertheless, it’s worth noting that the President’s position in Singapore is largely symbolic, offering a glimmer of hope to the cryptocurrency community.
Singapore’s President, Tharman Shanmugaratnam, Held the Role of Chairman at MAS for Over a Decade.
Shanmugaratnam’s foray into the realms of finance and economics predates his presidency by a significant margin.
His academic credentials are nothing short of remarkable, with degrees garnered from esteemed institutions including the London School of Economics, the University of Cambridge, and Harvard University’s Kennedy School of Government.
During the critical period spanning from 2007 to 2015, he assumed the dual responsibilities of Chairman at MAS from 2011 to 2023, and concurrently served as the Finance Minister of Singapore, illustrating his profound influence on the country’s financial landscape.
Throughout his tenure, Singapore had embraced a laissez-faire attitude toward cryptocurrencies, emphasizing that these digital assets and their associated trading activities did not present an immediate risk to the nation’s financial system, thereby negating the need for any form of prohibition.
However, in 2023, Shanmugaratnam’s stance underwent a significant transformation as he characterized cryptocurrencies as “intrinsically speculative and somewhat unconventional” during his address at the World Economic Forum.
He continued to advocate for a lack of strict regulation but emphasized the importance of authorities providing “extensive clarity” regarding the associated risks.
He urged caution against immersing oneself in an unending cycle of regulating these financial products.
Regulatory Landscape of Cryptocurrencies in Singapore
In November 2022, Shanmugaratnam unveiled a regulatory mandate stipulating that Singaporean banks must maintain a capital buffer of $125 for every $100 exposure to cryptocurrencies such as Bitcoin and Ethereum.
Despite these rigorous requirements, the exposure of banks to cryptocurrencies represented less than 0.05% of their total risk-weighted assets.
Recognizing the potential future roles of cryptocurrencies, Shanmugaratnam had previously acknowledged in 2021 that they might extend beyond speculative and illicit finance activities. He envisioned a future in which regulated stablecoins could serve valuable functions within traditional payment systems.
By August 2022, Shanmugaratnam disclosed that the Monetary Authority of Singapore (MAS) was actively reevaluating its approach to regulating stablecoins, particularly in response to the collapse of terraUSD (UST), a stablecoin that lost its peg to the U.S. dollar earlier that year.
In August of the same year, MAS released a comprehensive regulatory framework for stablecoins, reflecting the evolving landscape of cryptocurrency regulation in Singapore.
Although Shanmugaratnam’s presidency is primarily ceremonial, his track record of skepticism toward cryptocurrencies and commitment to maintaining a balanced regulatory approach will undoubtedly exert influence over the country’s financial policies, encompassing cryptocurrencies and central bank digital currencies alike.
