Uniformity in Crypto Regulations
Tharman Shanmugaratnam, Senior Minister as well as Chairman of the central bank of Singapore, has urged that crypto be regulated similarly to traditional finance.
The Chairman of the Monetary Authority of Singapore suggested that the regulations applicable to traditional finance be implemented upon digital assets.
He made these remarks when he was attending a discussion at the World Economic Forum (WEF). The event was attended by top government officials of the world and officials from global financial institutions.
Shanmugaratnam had been the Deputy Prime Minister of Singapore and had also served as the country’s Finance Minister.
Apart from being Dy. PM and Chairman of MAS, he is also Special Advisor to Singapore’s Prime Minister on economic policies. He is also looking at the affairs of social policies as the Coordinating Minister of the relevant ministry.
At WEF, Shanmugaratnam said that there is no doubt that every industry, whether traditional finance or crypto per se, requires regulations.
Non-Regulation of Crypto Would Lead to “Laundering” and “Corruption”
He also said that these sectors cannot be left unregulated or else they will give rise to money laundering, and corruption.
Shanmugaratnam opined that crypto regulation is necessary for so many reasons. He explained that regulations are required for the sake of financial stability and prudential purposes.
However, he suggested that if Singapore regulates the digital asset market like traditional finance then regulators would be forced to take a step back. He then suggested that Singapore would not want to go back.
He then discussed the other option which, according to him, is to clarify what can or cannot be regulated within the digital asset market.
He then proposed to make people that if they do invest, then the risks would be at their cost and expense.
Shanmugaratnam then said that he would rather be interested in the first option i.e. regulating crypto as that of traditional finance. He disregarded the second option on the pretext that ‘it lacks responsibility’.
Stablecoins Could Be Tested First For Regulation Purposes
On the other hand, the Chairman of MAS recommended that there are a few aspects of the crypto industry that can immediately be regulated.
He hinted at the possibility of regulating stablecoins whose oversight can be introduced in the first place.
While elaborating upon the importance of consumer awareness, MAS’s Chairman opined that full disclosure of risks to consumers is highly essential.
He remarked that crypto-interested individuals in Singapore be told very clearly that exposure to digital assets could be extremely risky.
Investors Are Apprised Clearly About the Risks
He also insisted that interested people be further apprised that the losses shall be exclusively borne by them.
Shanmugaratnam pointed out that there are certain activities that crypto entities do and are the same as that of traditional finance entities.
He gave an example that capital, reserve backing, as well as liquidity, are typical activities of traditional finance.
He then suggested that there is no harm in picking up traditional finance regulations to that effect and applying them to crypto entities.
Shanmugaratnam furthermore explained that the crypto industry lacks regulation and if somebody wishes to engage, then he must be wary of the risks.
Argument Growing Globally
The argument in which traditional finance regulations have been recommended to be applied to crypto is getting bigger worldwide. The argument seems to be adopted by not one but several states of the world.
For instance, a week before Singapore, it was Europe, Japan, etc., who also advocated for the adoption of traditional finance regulations for crypto.
At least the world is realizing that crypto is an integral part of the traditional financial system. It has been further realized that the crypto industry can no longer be ignored or left unsupervised.
The better sense seems to have prevailed amongst worldwide regulators. This sense has obviously emanated after the world’s leading crypto platform namely FTX has gone bankrupt and left behind millions of customers.
