Election Results and Background
Tharman Shanmugaratnam, formerly Singapore's finance minister and central bank chairman, secured the presidency with an impressive 70.4% of the vote. Replacing Halimah Yacob, he brings vast financial knowledge to a predominantly ceremonial role. With his election, there's potential for influence on financial policies, especially those about the digital currency landscape.
Track Record in the Financial Realm
Shanmugaratnam has deep roots in the world of finance. Serving as the chairman of the Monetary Authority of Singapore (MAS) from 2011 to 2023, his tenure saw the highs and lows of crypto companies like Terraform Labs and Three Arrows Capital. He began his illustrious career at MAS in 1982 after earning degrees from reputed institutions like the London School of Economics, the University of Cambridge, and Harvard University's Kennedy School of Government. His vast experience, which includes being shortlisted for the International Monetary Fund's top role, showcases his profound influence in the financial sphere.
Shanmugaratnam on Cryptocurrency
The president's initial attitude towards cryptocurrency was notably laissez-faire. In 2018, he publicly commented that cryptocurrency trading posed no threat to Singapore's financial system, negating the need for prohibition. This sentiment was echoed in 2023 at the World Economic Forum, where he labeled crypto as "purely speculative" and even "slightly crazy." He emphasized, however, that while crypto should remain unregulated, authorities need to clarify the associated risks.
Regulations for Banks and Stablecoins
Shanmugaratnam's view of cryptocurrencies in banking showcases a more cautious approach. In 2022, he revealed that Singaporean banks had stringent capital requirements against crypto exposure. For every $100 exposure to cryptocurrencies like Bitcoin or Ether, banks must hold $125 in capital. Despite these assets representing a small portion of total risk-weighted assets, they're subject to rigorous risk management standards. He has also noted the similarity in prudential treatment between less risky crypto assets and traditional non-tokenized assets.
Future of Crypto in Singapore's Finance
Looking ahead, Shanmugaratnam recognizes the potential role of cryptocurrencies in reshaping the world of finance. In 2021, he opined that the future of finance might see crypto playing a role beyond mere speculation and illicit finance. He even hinted at a world where "regulated stablecoins" integrate seamlessly into traditional payment systems.
