Heng Swee Keat Warns Retail Investors to Avoid Crypto, Money News

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 said on Tuesday (May 31). Sweet Keat.

He warned that retail investors should avoid cryptocurrencies even as Singapore adapts its rules to address key risks posed by cryptoassets.

“Retail investors in particular should avoid cryptocurrencies. We cannot stress this enough,” he said.

Heng was speaking at the opening of the second Asia Tech x Singapore Summit at The Ritz-Carlton Millenia Singapore hotel in Marina Bay, hosted by the Infocomm Media Development Authority.

He noted that crypto assets have attracted a lot of interest due to their phenomenal growth and promise of high returns and, more recently, the Terra Luna crash, which caused heavy losses for many investors and triggered financial shocks. ripple effects on Bitcoin and other cryptocurrencies.

Nonetheless, Singapore will continue to adapt its rules to ensure regulation remains innovation-friendly, the minister said.

Heng said crypto assets are part of a new wave of emerging digital technologies known as Web 3.0 and the way to approach this is to keep an open mind.

“We need to pierce both pride and the veil of suspicion to understand the potentially transformative underlying technologies,” he said. “Let’s not throw the baby out with the bathwater.

Indeed, the digital asset ecosystem includes a whole range of services beyond cryptocurrency trading.

“We remain keen to work with blockchain and digital asset players to encourage innovation and build trust in the industry,” he added.

Over the past two years, the Monetary Authority of Singapore (MAS) has granted licenses and in-principle approvals to 11 digital payment token service providers, including stablecoins like Paxos, crypto exchanges like Coinhako and traditional financial institutions like DBS Vickers.

At the same time, MAS consistently warned the public against trading in cryptocurrencies and took steps to limit the promotion of cryptocurrencies to the general public earlier this year.

DPM Heng Swee Keat speaking at the opening of the second Asia Tech x Singapore Summit on May 31, 2022. PHOTO: The Straits Times/Alphonsus Chern

“We will continue to evaluate applications and facilitate live experiences through regulatory sandboxes, to enable safe adoption in the financial industry,” Heng said.

He also announced the launch of Project Guardian, a collaborative effort by MAS to partner with the industry to explore the tokenization of financial assets and develop the future of financial infrastructure.

The industry’s first pilot project will be to explore the potential applications of decentralized finance in wholesale funding markets.

Mr. Heng said, “In short, we need to approach emerging technology with an open mind, separating hubris from its true underlying potential.

“Through regulation, we are working constructively to realize the gains of these new technologies, and we are partnering responsible and innovative players with strong risk management capabilities to build the foundations of the digital asset ecosystem.”

This article first appeared in The Straits Times. Permission required for reproduction.