During the World Economic Forum, Singapore’s Chief Minister Tharman Shanmugaratnam clarified his views on cryptocurrency regulation, giving insight into Singapore’s regulatory stance, which differs from other jurisdictions.

He said there was no question about the need to regulate cryptocurrency for money laundering, but beyond that, his preference is to educate consumers to understand that it is a risky and unregulated space. And if someone wants to invest, they do so at their own risk.

The minister, who is also the chairman of the Monetary Authority of Singapore (MAS), believes that if he starts regulating cryptocurrencies in a similar way to banks or insurance companies, that may not be the right path. “I think we need to take a step back and ask the basic philosophical question: does that legitimize something that is inherently purely speculative and actually kind of crazy?” Shanmugaratnam said. “Or is it better that we just provide a lot of clarity on what an unregulated market is?”

He did two ratings. One is where crypto or blockchain technology is used for the same activity as traditional finance. In that case, exactly the same rules will apply. But there is also a desire to regulate some specific crypto segments, in particular stablecoins.

At that point, a stablecoin inquiry opened by MAS last year also showed a departure from groupthink. For example, if a stablecoin is issued in multiple jurisdictions, including Singapore, MAS wants to have some certainty about the full issuance, even in other jurisdictions. This is an important issue that others have not taken into account.

Mr. Shanmugaratnam also spoke about the potential of blockchain to make global payment systems more efficient. “It may well be that there are some blockchain applications that can provide some disruption and some needed innovation there,” he said. But at the same time, he believes that it is necessary to interconnect the traditional domestic payment systems in real time, the LBTR. He sees that as an alternative response to blockchain innovations.

Meanwhile, Singapore is very active in blockchain for cross-border payments. He was an early driver of central bank digital currency (CBDC) research through MAS’s Ubin Project. One result of that is a private initiative for multi-currency payments, Partior, co-founded by JP Morgan, DBS Bank and Temasek.

MAS has also expanded its CBDC activities. He started Project Dunbar, a single platform for multiple CBDCs. And most recently, he launched the Ubin+ Project for cross-border CBDC research. This multi-pronged research program includes a collaboration with the New York Federal Reserve, as well as a separate alliance with the central bank of France and Switzerland to experiment with automated market makers (AMM), a DeFi tool, for exchanging currencies in cross-border transactions. Payments