Crypto Cynic Becomes Singapore's New President

Crypto Cynic Becomes Singapore’s New President

Singapore elects Tharman Shanmugaratnam as its new president, previously known for skepticism toward cryptocurrencies, now emphasizing “ultra clarity” and a balanced regulatory approach.

Key Points

  • Singapore elects Tharman Shanmugaratnam as its 9th president, succeeding Halimah Yacob.
  • Shanmugaratnam, previously Finance Minister and Chairman of MAS, had referred to cryptocurrencies as “inherently purely speculative and slightly crazy.”
  • Despite skepticism, he advocated for unregulated cryptocurrencies with “ultra clarity” on associated risks.

Singapore recently elected Tharman Shanmugaratnam as its 9th president, succeeding Halimah Yacob. While Shanmugaratnam had previously referred to cryptocurrencies as “inherently purely speculative and slightly crazy,” the role of the President in Singapore is mostly ceremonial, offering a sense of relief to the crypto community.

From Finance Minister to President

Shanmugaratnam’s journey in the world of finance and economics began long before his presidential tenure. With an impressive academic background, including degrees from prestigious institutions like the London School of Economics, the University of Cambridge, and Harvard University’s Kennedy School of Government, he served as the Chairman of MAS from 2011 to 2023. Concurrently, he also held the position of Finance Minister of Singapore from 2007 to 2015.

During his time as Chairman of MAS, Singapore adopted a laissez-faire approach towards cryptocurrencies, recognizing that they posed no immediate threat to the country’s financial system. As a result, there were no prohibitions on cryptocurrencies and related trading activities.

However, Shanmugaratnam’s perspective on cryptocurrencies shifted in 2023 when he referred to them as “inherently purely speculative and slightly crazy” at the World Economic Forum. Despite his skepticism, he maintained that cryptocurrencies should remain unregulated but called for authorities to provide “ultra clarity” on associated risks.

Crypto Regulations in Singapore

In November 2022, Shanmugaratnam implemented a requirement for Singaporean banks to maintain $125 in capital for every $100 exposure to cryptocurrencies like Bitcoin and Ethereum. However, despite these stringent requirements, the exposure of banks to cryptocurrencies accounted for less than 0.05% of total risk-weighted assets.

In 2021, Shanmugaratnam acknowledged the potential future role of cryptocurrencies, suggesting 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, Shanmugaratnam announced that MAS was actively reconsidering its approach to regulating stablecoins, prompted by the collapse of terraUSD (UST). This stablecoin had lost its peg to the U.S. dollar earlier in the year. Consequently, in August of this year, MAS released a regulatory framework for stablecoins, reflecting the evolving cryptocurrency regulation landscape in Singapore.

While Shanmugaratnam’s presidency is mainly ceremonial, his history of skepticism towards cryptocurrencies and his commitment to a balanced regulatory approach will undoubtedly shape the country’s policies in the financial realm, including those related to cryptocurrencies and central bank digital currencies.