There need to be “simply one regulatory structure” for both traditional banking and cryptocurrency, according to Singapore’s senior minister and head of the central bank, the Monetary Authority of Singapore (MAS).
Additionally, he emphasized that regulators should “ultra-clearly define” what constitutes an uncontrolled market so that investors understand they do so at their own risk.
At a panel discussion with other regulators and bankers last week at the World Economic Forum, Tharman Shanmugaratnam, Singapore’s senior minister and chairman of the nation’s central bank, the Monetary Authority of Singapore (MAS), discussed the regulation of cryptocurrencies.
Prior to becoming finance minister, Shanmugaratnam was Singapore’s deputy prime minister.
He presently serves as the prime minister’s advisor on economic policy as well as the minister responsible for coordinating social policy.
“One thing is pretty clear: you have to regulate for things like money laundering, whether it’s cryptocurrency or regular finance.”
But in addition to that, the minister said, “I think we’ve got to go back and examine the basic philosophical question if you have to think about regulating crypto the same way we regulate banks, insurance firms, and so on — for prudential reasons, for financial stability reasons.
Or would it be better if we just made it crystal clear that if you enter a market that is unregulated, you do so at your own risk?
Stablecoins were mentioned as a potential area of regulation as the MAS chairman continued to explain that some aspects of the cryptocurrency market should be regulated.
But he said, “I’m not convinced that’s the proper way to go to start getting into a game of regulating, whether it’s ostrich eggs or crypto or anything else, it’s going to be a never-ending game.”
In addition to highlighting the significance of “consumer education,” he added the following: “But also just extreme clarity — make very clear that this is a risk you are taking at your own expense, and by the way please don’t take that risk because it’s going to be silly.
“And then, if cryptocurrency, blockchain, or any other aspect of that ecosystem would like to do things that traditional finance is doing, you apply precisely the same restrictions to that — capital, liquidity, reserve backing — exactly the same requirements,” Minister Shanmugaratnam continued. He declared: