Tharman Shanmugaratnam, the former Singapore finance minister and central bank chairman, has been elected as the country’s president with a significant majority of 70.4% of the vote.
In a surprising statement, the 66 years old, has labeled cryptocurrency as “purely speculative” and “slightly crazy.” He will now occupy a largely ceremonial role, but his extensive experience could potentially influence the country’s policies, particularly those related to the future of finance, including cryptocurrencies and central bank digital currencies (CBDCs).
Singapore has undergone a significant shift from being an early adopter of crypto to seeking a balanced regulatory approach. During Shanmugaratnam’s tenure as chairman of Singapore’s central bank, the Monetary Authority of Singapore (MAS), the collapse of local crypto companies Terraform Labs and Three Arrows Capital occurred, leading to a reassessment of regulatory measures.
Shanmugaratnam’s career trajectory includes multiple governmental roles. He served as chairman of MAS from 2011 to 2023, overlapping with his time as finance minister from 2007 to 2015. Prior to that, he started his professional journey as an economist at MAS in 1982 after completing his education with degrees from prestigious institutions such as the London School of Economics, the University of Cambridge, and Harvard University’s Kennedy School of Government. Moreover, he was a contender for the leadership position at the International Monetary Fund (IMF). Additionally, Shanmugaratnam had a 22-year tenure as a member of parliament, where he held various governmental positions, including deputy prime minister.
Initially, Shanmugaratnam held a laissez-faire approach towards cryptocurrencies. In 2018, he asserted that cryptocurrencies and related trading activities did not pose a threat to Singapore’s financial system and saw no need for prohibition. This stance was restated in 2023 at the World Economic Forum when he described crypto as inherently speculative and slightly crazy, suggesting that it should remain unregulated while authorities should provide clarity on associated risks.
However, the situation differs for banks and stablecoins. In November 2022, Shanmugaratnam addressed the exposure of Singapore’s banks to cryptocurrencies, stating that they are required to hold capital against the exposure and that such assets are subject to robust risk management requirements mandated by international standard-setters. Furthermore, regarding stablecoins, he expressed a belief in their potential contribution to traditional payment systems if subject to regulation. As a result, the MAS has been actively reviewing regulations for stablecoins and recently released a regulatory framework for these assets.
The election of Tharman Shanmugaratnam as Singapore’s president raises questions about the future direction of crypto policy in the country. With his background in finance and the lessons learned during his tenure as central bank chairman, it remains to be seen how his influence might shape Singapore’s approach to cryptocurrencies, CBDCs, and other financial innovations. Market participants and industry observers will closely monitor any developments in this space as Singapore seeks to find the delicate balance between fostering innovation and managing risks in the rapidly evolving crypto landscape.
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