Singapore Deputy PM: 'No Strong Case to Ban Cryptocurrency Trading'

Singapore's government has indicated that it sees no need to prohibit cryptocurrency trading.

Tharman Shanmugaratnam, Singapore's deputy prime minister and chairman of Monetary Authority of Singapore (MAS), said in a written response to MPs yesterday that cryptocurrency and related trading activity currently do not pose any threat to Singapore's finance system.

He stated that 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."

The comments are a direct response to lawmakers Saktiandi Supaat, Lim Biow Chuan and Cheng Li Hui, who questioned the PM over possibility of banning cryptocurrency in Singapore, according to an order paper prior to a parliament meeting on Feb. 5.

The deputy PM wrote:

"For now, the nature and scale of cryptocurrency 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."

As such, Shanmugaratnam said, regulators "do not have broader, systemic risk concerns with regard to cryptocurrencies."

The comment is also in line with an October 2017 report in which Ravi Menon, managing director of MAS, indicated that the central bank would not regulate cryptocurrencies.

Yet, Shanmugaratnam stated in his written response that the institution is aware of the possible use of cryptocurrency in illicit activities such as money laundering and is taking relevant measures to tackle the issue.

MAS will be imposing anti-money laundering and anti-terrorism financing (AML/CFT) requirements on intermediaries that buy, sell or exchange cryptocurrencies, he said, adding: "We set out this AML/CFT regulatory framework for virtual currency intermediaries last year as part of our public consultation on the proposed Payment Services Bill."