Cryptocurrencies are not for kids, says Singapore for the 1,000th time

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Hi there,

On Monday, Ravi Menon, the managing director at the Monetary Authority of Singapore (MAS), opened his speech with a caveat: He won’t be revealing anything new. There would be no new insights, just an old trope about MAS’ stance on cryptocurrencies.

And what an old trope it turned out to be.

MAS wants to promote blockchain innovation but wants to protect the everyday person from cryptocurrency speculation.

More specifically, the regulator is totally happy to encourage financial enterprises to experiment with and deploy blockchain for business – be it for wholesale banking, trade finance, cross-border payments, and so forth. What’s not OK is for retail investors to speculate their savings on cryptocurrency tokens in the hopes of becoming the next Crazy Rich Asian.

(The exact phrase Menon used to describe cryptocurrencies was “highly hazardous for retail investors.”)

Most media focused on the potential regulatory tightening for retail investors, but this misses the point since protecting them is merely one out of the five risks of the digital asset industry that Menon covered in his speech. (The link to the full speech is in the next section of this newsletter.)

The truth of the matter is that Singapore is and will always be operating amid a sea of conundrums. To understand the government’s implicit stance on cryptocurrencies, look no further than the casinos at Resorts World Sentosa and Marina Bay Sands, which run alongside the myriad illegal gambling dens that make local headlines every now and then.

Locals – that is, Singaporeans and Singapore permanent residents – are discouraged from entering those swanky casinos with a hefty S$150 entry fee.

Anti-gambling messaging is also prevalent throughout the city-state through public advertisements in out-of-home displays, cinemas, and even not-so-subtle programming in dramas on local TV. Everyone is perfectly aware of the tragic consequences of gambling addiction.

Basically, gambling is permitted in Singapore but is strictly ring-fenced.

When it comes to cryptocurrencies, it has never been easier for anyone to access the market through exchanges such as Crypto.com, which began operations without a digital payment token (DPT) license and now has in-principle approval.

However, MAS has consistently issued stern warnings against cryptocurrency speculation and limiting public advertising of cryptocurrency services. It’s also been painfully difficult for any cryptocurrency company to get a full DPT license, which effectively means that most of them are operating in a regulatory gray area.

Reading between the lines, what MAS actually means is this: We don’t like cryptocurrency speculation, but we’re not going to stop it completely. And if things get out of hand, we reserve the right to pull the plug.

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ON THE SOAPBOX

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⭐ TO THE STARS

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🌙 TO THE MOON

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🌏 BACK TO EARTH

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STILL A PONZI SCHEME

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