Tharman Shanmugaratnam, the former Singapore finance minister and central bank chairman who has called crypto “purely speculative” and “slightly crazy,” was elected the country’s president Saturday with 70.4% of the vote, replacing Halimah Yacob, its first female head of state.
While the role is largely ceremonial, the 66-year-old’s experience might mean he has some influence in shaping policy related to the future of finance, including cryptocurrencies, central bank digital currencies (CBDCs) and more.
Singapore has gone from being an early adopter of crypto to a jurisdiction trying to find the right regulatory balance after the collapse of homegrown crypto darlings Terraform Labs and Three Arrows Capital while Shanmugaratnam was chairman of Singapore’s central bank, the Monetary Authority of Singapore (MAS).
That was a role he held between 2011 and 2023, overlapping his time as finance minister between 2007 and 2015. He began his career as an economist at the MAS in 1982 after a receiving a Bachelor of Science in Economics from the London School of Economics, a Master of Philosophy in Economics from the University of Cambridge and a Master in Public Administration from Harvard University’s Kennedy School of Government. He was also short-listed for the top job at the International Monetary Fund (IMF). Shanmugaratnam spent 22 years as a member of parliament, holding several governmental roles including deputy prime minister,
Shanmugaratnam’s early stance on cryptocurrencies was laissez faire.
In 2018, when he wrote cryptocurrency and related trading activity did not pose any threat to Singapore’s finance system, and there was no need to prohibit it.
He reiterated that stance in 2023, saying at the World Economic Forum, that crypto is “inherently purely speculative and in fact slightly crazy.” While it should remain an unregulated market, he suggested authorities should provide “ultra clarity” on the risks associated with crypto because to “start getting into a game of regulating products, ostrich eggs or crypto or anything else” would be a “never-ending game.”
Still, for banks and stablecoins the situation is somewhat different.
In November 2022, Shanmugaratnam wrote a response to a question in parliament saying that Singapore’s banks are required to hold $125 of capital against an exposure of $100 to cryptocurrencies like bitcoin (BTC) or ether (ETH). “Although the jurisdiction’s banks have ‘insignificant’ levels of exposure to crypto – contributing less than 0.05% of total risk weighted assets – these types of crypto assets are subject to the toughest risk management requirements set by international standard-setters,” he wrote.
He added that the prudential treatment for less risky crypto assets, such as tokenized corporate bonds, is similar to the traditional non-tokenized asset.
In 2021, Shanmugaratnam said “there may be a role for crypto in future finance that extends beyond pure speculation and illicit finance” and that he envisioned a future in which “regulated stablecoins will have a useful role in a traditional payment system.”
In August 2022, Shanmugaratnam said the MAS was “actively reviewing” its approach to regulating stablecoins and could potentially bring reserve requirements for stablecoin issuers, referencing the collapse of terraUSD (UST) a stablecoin that lost its U.S. dollar peg the previous May. Last month, the MAS released a regulatory framework for stablecoins.
