Heng Swee Keat: Stay Away from Crypto!

Heng Swee Keat – the deputy prime minister of Singapore – is telling all retail investors to steer clear of cryptocurrencies, warning that putting one’s life savings or tons of money into the arena could lead to serious financial problems.

Heng Swee Keat Issues Crypto Warning

He mentioned during a recent conference:

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

His words come following the crash of both Terra and Luna, algorithmic stable coins that fell into oblivion a few weeks ago after they were de-pegged. These assets were not tied to any physical collateral or fiat currencies, and thus were considered much riskier in the stable coin market than items like Tether or USD Coin (USDC).

The destruction of both assets caused a huge collapse in the crypto market, with many major coins – including bitcoin, Ethereum, Solana, and Cardano – dropping to new lows and virtually losing all their 2021 gains. Only now is bitcoin beginning to show signs of coming back, with a price currently set at $31,500. This may not seem like much, though it’s huge given that the currency was trading in the mid-$20,000 range just a few weeks ago.

While warning everyone to stay away, however, Keat managed to contradict himself somewhat in the same speech by claiming that crypto and blockchain had the ability to completely change the financial space for the better. He commented:

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.

Regulation has become a serious topic in Singapore, with the Monetary Authority of Singapore (MAS) recently passing legislation that required all crypto exchanges and related platforms looking to do business outside the country to be fully licensed. Over the past two years, only 11 companies have managed to obtain licensure through the agency.

Keat stated:

We will continue to evaluate applications and facilitate live experiments through regulatory sandboxes to enable safe adoption in the financial sector.

Time to Explore Defi

Not long ago, Keat also launched what he’s called Project Guardian, which he says will be utilized to explore further tokenization opportunities and “develop the future of finance infrastructure.” One of the big initiatives of the organization will be to explore decentralized finance (defi). Keat mentioned:

In short, we must approach emerging tech with an open mind, separating the hubris from its true underlying potential. Through regulation, we work constructively to realize 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… Our investment in quantum computing and quantum engineering is part of our approach of trying to anticipate the future, and proactively shaping the future that we want.

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