There has always been a big debate on how crypto should be regulated. Well, a senior minister and chairman of the central bank of Singapore wants a single rulebook for crypto and traditional finance. This could be quite an efficient mechanism for managing the crypto markets. The regulator also said that investors must be given clarity about unregulated markets so they know whether to go in.
A single rulebook for crypto and traditional finance
A senior minister and the chairman of Singapore’s central bank, Tharman Shanmugaratnam, has recently spoken in favor of a single regulatory system for both cryptocurrencies and traditional finance. Last week, he was part of a panel discussion with other regulators and bank officials at the world economic forum.
Tharman’s idea regarding how regulation should be implemented is very clear. He said that the plan is to prevent things like money laundering, be it for crypto or for traditional finance. Then he asked a question that many people have asked in the past. If we treat crypto the same way as banks, insurance companies, and other traditional financial institutions, then would it be legitimizing something that is purely speculative? That’s something we must consider before planning how to regulate crypto.
Tharman is of the opinion that a better approach would be to clarify what is an unregulated market and what the risks are involved if someone goes in. It is then up to investors what they want to do. This doesn’t mean that the authorities are encouraging investors to invest in crypto; it’s just that they have the option. However, they will definitely advocate that this decision would be foolish and investors could lose all their money.
Finally, he added that if crypto and blockchain want to do similar things as traditional finance, the same regulations will apply to the industry.
Regulation is important
There have been many opinions on how crypto and crypto exchanges should be regulated. Some have suggested treating platforms like banks so they cannot misuse customer funds. And now we have regulators saying to treat the entire space like traditional finance.
What are your thoughts as Singapore’s central bank chairman talks in favor of a single rulebook for crypto and traditional finance? Let us know in the comments below. And, if you found our content informative, share it with your family and friends.