Last Updated on September 4, 2023 by Bitfinsider

Former Singapore finance minister and central bank governor Tharman Shanmugaratnam, who has referred to cryptocurrencies as “purely speculative” and “slightly crazy,” was elected president of the nation on Saturday with 70.4% of the vote, unseating Halimah Yacob, the nation’s first female head of state.

The 66-year-old’s experience may allow him to have some impact over policy regarding the future of finance, including cryptocurrencies, central bank digital currencies (CBDCs), and other topics, even though his position is primarily ceremonial.

When Shanmugaratnam was chairman of Singapore’s central bank, the Monetary Authority of Singapore (MAS), the country was an early adopter of cryptocurrency. However, following the failure of domestic cryptocurrency hotspots Terraform Labs and Three Arrows Capital, the country is now attempting to strike the correct regulatory balance.

He served in that capacity from 2011 to 2023, which coincided with his tenure as finance minister from 2007 to 2015. After earning 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 of Public Administration from Harvard University’s Kennedy School of Government, he started working as an economist at the MAS in 1982. Additionally, he was considered for the International Monetary Fund’s (IMF) top position. Shanmugaratnam served in parliament for 22 years, serving in a number of positions including deputy prime minister. He took a laissez-faire approach to cryptocurrencies in the beginning.

He stated in 2018 that there was no need to outlaw cryptocurrency trading since it did not represent a threat to Singapore’s financial system.

At the World Economic Forum in 2023, he restated his position, claiming that cryptocurrency is “inherently purely speculative and in fact slightly crazy.” He said that although the industry should remain unregulated, authorities should give “ultra clarity” on the hazards connected to cryptocurrencies because it would be a “never-ending game” to “start getting into a game of regulating products, ostrich eggs, crypto, or anything else.”

Still, things are a little bit different for stablecoins and banks.
In response to a query in parliament in November 2022, Shanmugaratnam wrote that Singapore’s banks must maintain $125 in capital against a $100 exposure to cryptocurrencies such as ether (ETH) or bitcoin (BTC). “While the jurisdiction’s banks contribute less than 0.05% of total risk-weighted assets, their exposure to cryptocurrency is ‘insignificant,’ these assets are subject to the strictest risk management requirements set by international standard-setters,” the author stated.

He went on to say that tokenized corporate bonds and other less hazardous crypto assets are treated similarly to regular non-tokenized assets in terms of prudential regulation.

According to Shanmugaratnam’s 2021 statement, “regulated stablecoins will have a useful role in a traditional payment system” and “there may be a role for crypto in future finance that extends beyond pure speculation and illicit finance.”