SINGAPORE – Crypto assets like cryptocurrencies and non-fungible tokens (NFTs) are constantly evolving and highly risky but have the potential to transform the future of finance, Deputy Prime Minister Heng Swee Keat said on Tuesday (May 31).
He warned retail investors steer clear of cryptocurrencies even as Singapore adapts its rules to addresses the key risks that crypto assets pose.
“Retail investors especially should steer clear of cryptocurrencies. We cannot emphasise this enough,” he said.
Mr Heng was speaking at the opening of the second Asia Tech x Singapore (ATxSG) summit at The Ritz-Carlton Millenia Singapore hotel in Marina Bay, organised by the Infocomm Media Development Authority.
He noted that crypto assets have gathered much interest due to their phenomenal growth and promises of high returns and, more recently, the crash of Terra Luna which caused many investors to suffer heavy losses and triggered knock-on effects on Bitcoin and other cryptocurrencies.
Nevertheless, Singapore will continue to adapt its rules to ensure that regulation remains facilitative of innovation, the minister said.
Mr Heng said crypto assets are part of a new wave of emerging digital technologies known loosely as Web 3.0 and the way to approach this is to keep an open mind.
“We must pierce through both the hubris and the veil of suspicion, to understand the potentially transformative underlying technologies,” he said. “Let us not throw out the baby with the bathwater.”
This is because the digital asset ecosystem comprises an entire range of services beyond cryptocurrency trading.
“We remain keen to work with blockchain and digital asset players to encourage innovation, and build up trust in the sector,” he added.
In the last two years, the Monetary Authority of Singapore (MAS) has granted licences and in-principle approvals to 11 digital payment token service providers, including stablecoin players like Paxos, crypto exchanges like Coinhako and traditional financial institutions like DBS Vickers.
At the same time, the MAS has consistently warned the public against trading in cryptocurrencies and took steps to limit promotion of cryptocurrencies to the general public earlier this year.