Cryptocurrencies have a place in Singapore’s financial sector if these digital assets are regulated. Especially stablecoins, according to the chairman of the Monetary Authority of Singapore.
Singapore is building its status as a crypto-technology hub and laying the framework for trading, listing, tokenisation and custody.
“There may be a role for crypto in future finance that extends beyond pure speculation and illicit finance.”– Tharman Shanmugaratnam, Chairman of the Monetary Authority of Singapore
Stablecoins, for example, can have a role together with traditional payment systems, though these digital assets need to be regulated for illicit finance activities including anti-money-laundering, he said.
The central bank maintains an “open mind” on cryptocurrencies because the regulator wants technologies and innovation to develop, said Tharman. He is one of Singapore’s most influential politicians who has held roles in the International Monetary Fund.
“Wise and Foolish” – Tharman
Tharman’s comments come as Singapore builds its status as a crypto-technology hub. And lays the framework for activities such as trading, listing, tokenisation and custody. In contrast, countries like China have taken a more hardline approach.
Still, Tharman doesn’t see cryptocurrencies replacing money as legal tender given their volatile and speculative nature.
“If you have an instrument that is volatile in pricing, it’s never going to become money,” he said. “It’s going to be a speculative asset, for both the wise and foolish.”
The city recently granted licenses to the brokerage arm of DBS Bank Ltd and the Australian cryptocurrency exchange. Even as the regulator has been warning the public about the risks of trading digital assets such as bitcoin.
El Salvador became the first country to adopt bitcoin as a legal tender in September. As a result, drawing attention to whether the move would entice people to transact with bitcoin and bring any benefits to the country. The experiment had a rocky start, however.
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