FTX collapse reinforces need for regulation against crypto speculation: Lawrence Wong

THE collapse of cryptocurrency exchange FTX has only reinforced Singapore’s strong stance against crypto speculation and trading, even as it continues to see great potential in digital asset innovation, said Deputy Prime Minister and Finance Minister Lawrence Wong on Thursday (Nov 17).

“We are open to digital innovation and digital asset innovation, but we are not open to crypto speculation at all,” said Wong, adding that the latest saga has only reinforced the government’s view that it is on “the right track” to “go big” on digital asset innovation.

At the same time, Singapore intends to continue exploring tighter regulatory rules around crypto trading and retail investors’ access to cryptocurrencies. “We had put out a consultation paper and will review the rules that are necessary,” he said.

Wong was speaking at the Bloomberg New Economy Forum at Capella Singapore, where he was asked about a range of issues, including US-China relations and inequality in Singapore.

While the landmark meeting between US President Joe Biden and Chinese leader Xi Jinping was an “important and constructive” one, the world is still at risk of becoming a more bifurcated and Balkanised one as the “fundamental differences” between the two remain, said the minister.

“This is really just the beginning of a long and difficult journey, so we shouldn’t have any illusions that this one meeting will change things overnight, because there has been such deep suspicions and distrust built over so many years,” he added.

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Asked whether Biden’s recent move to control the export of American chip technology to China would be viewed as overly aggressive to China, Wong replied that while there are legitimate concerns over supply chain resilience, there is a risk of going too far and this will have far reaching consequences.

“If there are critical dependencies in essential areas, and there’s a need for more diversification, well then good. All of us would support that... but diversification is not decoupling,” he said.

“If diversification becomes decoupling, and you have separate supply chains, different technology, circles which cannot interact with one another, countries will have to choose sides and no one wants to be in that position,” he added.