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Singapore

Crypto highly risky, but it also has potential to transform future of finance: DPM Heng

10:49 Min
Singapore is investing S$23.5 million into quantum technology capabilities to solve a range of real-world challenges, such as cyber threats. The technology can boost computer speeds over a trillion times faster than an ordinary laptop. Jeraldine Yap tells us more. 

SINGAPORE: Crypto assets are a "highly risky space", but it also has the potential to transform the future of finance, Deputy Prime Minister Heng Swee Keat said on Tuesday (May 31).

"We must continue to adapt our rules to ensure that regulation remains facilitative of innovation, and yet addresses the key risks that crypto assets pose," said Mr Heng, speaking at the Asia Tech x Singapore 2022 Summit.

He highlighted that the Monetary Authority of Singapore (MAS) has consistently warned the public against trading in cryptocurrencies amid steps to limit promotion of cryptocurrencies to the general public earlier in 2022.

"Many investors suffered losses and even lost their life savings in the recent meltdown of TerraUSD and Luna, which triggered knock-on effects on Bitcoin and other cryptocurrencies," he said.

"Retail investors especially should steer clear of cryptocurrencies. We cannot emphasise this enough."

However, Mr Heng noted that the digital asset ecosystem comprises an entire range of services beyond cryptocurrency trading, and added that Singapore remains keen to work with blockchain and digital asset players to encourage innovation, and build up trust in the sector.

NEW INITIATIVES

MAS has granted licences and in-principle approvals in the past 2 years to 11 digital payment token service providers, including stablecoin players like Paxos, crypto exchanges like Coinhako, and traditional financial institutions like DBS Vickers.

Singapore will also continue to evaluate applications, and facilitate live experiments through regulatory sandboxes, to enable safe adoption in the financial sector, said Mr Heng.

The financial authority has also been working with the industry on several digital asset initiatives, said Mr Heng, who launched Project Guardian at the summit on Tuesday.

The project is a collaborative effort by MAS to partner the industry to explore the tokenisation of financial assets and develop the future of finance infrastructure. The first industry pilot will be to explore potential decentralised finance (DeFi) applications in wholesale funding markets.

"In short, we must approach emerging tech with an open mind, separating the hubris from its true underlying potential," said Mr Heng.

"Through regulation, we work constructively to realise the gains of these new technologies, and partner responsible and innovative players with strong risk management capabilities to build the foundations of the digital asset ecosystem."

He also announced two new programmes under the Quantum Engineering Programme (QEP), a national initiative launched in 2018 that aims to leverage quantum technologies to solve real-world problems

According to Mr Heng, the investment in quantum computing and quantum engineering is part of Singapore's approach of trying to anticipate the future, and proactively shaping the future that the country wants.

The first programme is the National Quantum Computing Hub, formed by pooling expertise from the Centre for Quantum Technology, and across other institutions in Singapore. The programme will enable Singapore to further strengthen talent development and provide better access to quantum technology.

The second programme is the National Quantum Fabless Foundry, which will support micro and nanofabrication of quantum devices across partner cleanrooms. Through the programme, Singapore seeks to partner the industry to develop more quantum devices for solving real-world challenges, building on its strengths in advanced manufacturing.

"The greater the potential of cyberspace, the greater the cyber risks. Malicious actors will seek to profit from these through any means," said Mr Heng.

"To counter them, we not only need to remain vigilant to present threats, we must also stay invested to stay much further ahead," he added. 

"In this way, we can put a greater distance between critical parts of the digital space and threat actors."

Source: CNA/ic(gr)
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