Singapore Minister Seeks Uniformity for Crypto, TradFi Regulation

Singapore Senior Minister and Monetary Authority of Singapore (MAS) chairman Tharman Shanmugaratnam has called for more uniformity and clarity when it comes to regulating the digital assets space.

Speaking at a panel discussion at the World Economic Forum held in Davos last week, Shanmugaratnam said that there should be “one regulatory system” for both crypto and traditional finance.

“If you have to think about regulating crypto the same way we regulate banks, insurance companies, and so on — for prudential reasons, for financial stability reasons — I think we’ve got to take a step back and ask the basic philosophical question: does that legitimize something that’s inherently purely speculative, and in fact, slightly crazy?” the minister said

While Shanmugaratnam noted that the regulation is a "never-ending game" whether it's "ostrich eggs or crypto or anything else," he also highlighted that the risk of cryptocurrencies should be clearly defined by regulators, so that investors would be entering the market at their own risk.

"And then if crypto or blockchain or any of the parts of that ecosystem would like to do things that traditional finance is doing, you apply exactly the same regulations to that — capital, liquidity, reserve backing — exactly the same regulations," he said

"So people are very clear. There is one regulatory system for everything. And if you’re outside of the regulatory system, buyer beware," he added.

Different rulebook for investments?

Once touted as a crypto hub, Singapore has lost some of its allure as a crypto-friendly nation, with many leading companies in the industry growing wary of the tightening regulations in the city-state.

Furthermore, the MAS has expressed reluctance for retail investors to be involved in crypto, and has banned crypto companies from directly advertising to retail customers.

In August, MAS chairman Ravi Menon said that the regulator is contemplating “adding friction” on retail access to cryptocurrencies, in a bid to protect retail investors from the speculative nature of the crypto market.

Despite what seems like a clear and hard handed approach to regulating the crypto industry, Singapore's two sovereign funds, GIC and Temasek, are invested in a number of retail-facing crypto companies, with the latter even establishing itself as the third-largest investor in FTX prior to the exchange's dramatic collapse. Temasek wrote down its US$275 million investment in FTX (amounting to 0.09% of its US$403 billion portfolio) on November 17.