Singapore’s deputy prime minister has said that there is ‘no strong case to ban cryptocurrency trading’ as they don’t pose a risk to the country’s financial system.
In response to questions posed by members of parliament, Deputy Prime Minister Tharman Shanmugaratnam expressed the view that ‘cryptocurrencies are an experiment,’ with the cryptocurrency market growing internationally, reports Singapore’s central bank, the Monetary Authority of Singapore (MAS), adding:
The Monetary Authority of Singapore (MAS) has been closely studying these developments and the potential risks they pose. As of now, there is no strong case to ban cryptocurrency trading here.
This will, no doubt, be positive news for the digital currency market. Of late there has been increasing regulatory pressure from global authorities to clampdown on the industry.
China became the first to crack down on domestic cryptocurrency trading in September, but the Chinese government has recently announced that it plans to ban all digital currency trading, including those of foreign platforms, in a bid to stamp out the sector in the country. South Korea is also ramping up its efforts as is India.
At the beginning of the month, India’s finance minister, Arun Jaitley, said during his budget speech that the government doesn’t consider cryptocurrencies such as bitcoin as legal tender and that it would ‘take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system.’
Shanmugaratnam went on to say that ‘trading in Singapore does not pose risks to the safety and integrity of our financial system.’
Its use in making payments is small, and trading volumes of cryptocurrencies in Singapore are also not high – they are much smaller than in countries like the U.S., Japan, and South Korea. Further, connections between cryptocurrency trading and Singapore’s financial system are also not significant at present. Singapore’s banking system does not have any significant exposure to global and local entities dealing in cryptocurrencies. We hence do not have broader, systemic risk concerns with regard to cryptocurrencies.
That’s not to say MAS isn’t watching for industry developments. In a bid to determine how best to handle the evolving market MAS are part of regulatory discussions on how the risks posed by cryptocurrencies are best addressed.
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