Why Singapore's Presidential Election Matters For Crypto

2023/08/31 07:04

Singaporeans will be heading to the polls tomorrow to vote for a new president.

Currently, there are three candidates who are competing for votes- and two of them have already offered extremely different views on cryptocurrency.

The who’s who of the presidential election

Tharman Shanmugaratnam, a former Deputy Prime Minister, has had one of the most storied careers managing the city state’s finances.

During his tenure as Deputy Prime Minister, he also served as chairman of the Monetary Authority of Singapore (MAS), which functions as Singapore’s central bank, as well as the Government of Singapore Investment Corporation (GIC), which is a government-owned company that manages Singapore’s sovereign wealth fund and foreign reserves.

It was during this period that MAS oversaw regulation of the rapidly growing cryptocurrency industry, with well-thought out regulatory policies and restrictions on marketing and advertising of crypto products and services.

While MAS received a fair bit of criticism during the bull run for stifling innovation in the industry, we should also consider that these policies could be responsible for saving many people’s wallets and livelihoods during the bear market.

During the World Economic Forum, Tharman gave his two cents on crypto, saying that he prefers to educate consumers on the risks of investing in crypto, as opposed to taking other measures like banning it.

Thus far, he’s also noted that he sees significant promise for blockchain technology, for stablecoins and payments in particular.

On the other hand, one of Shanmugaratnam's opponents could not be more different.

Tan Kin Lian today is mainly known as a controversial figure in Singapore’s political system. But putting that aside for now, Tan has actually also had a long history serving the public as well- as CEO of NTUC Income. During his 30-year tenure in this position, he oversaw the company’s development from having S$28 million in assets to over S$17 billion in assets and over a million policyholders.

However, during an interview with The Daily Ketchup, Tan made his stance on cryptocurrency known. He made clear his opposition to the industry, saying that cryptocurrency has no value and that the digital currency should have no place in Singapore’s reserves.

Additionally, he criticised Temasek’s investment into the now-bankrupt crypto exchange FTX, and said that “it would not have happened if I am the president”.

The final candidate for the election, Ng Kok Song, has remained mum about the subject of cryptocurrencies. However, he has served as Chief Investment Officer of the Government of Singapore Investment Corporation (GIC). Prior to that, he had also served in the Ministry of Finance and the Monetary Authority of Singapore.

Since then, he has founded his own investment firm, Avanda Investment Management, with two former GIC colleagues.

The powers of the president

While Singapore operates on a parliamentary system (i.e., executive and legislative powers are united in the Prime Minister), the president still has some executive roles.

For example, the President has the power to veto budgets or for appointments to key offices, such as the Chief Justice and the Attorney-General. Additionally, any government expenditure that is funded by drawing down on past reserves needs to be approved by the President.

Primarily, however, what we are interested in here is the President’s role as a fiscal guardian of the nation’s reserves.

In this role, the opinions of presidential candidates would matter a great deal.

While it is questionable if a President can actually block certain investments from being made, especially those that do not draw down on past reserves, the president can influence policy in other ways.

MAS, Singapore’s central bank, is run by a Board of Directors, “who are “responsible for the policy and general administration of the affairs and business of MAS, and informs the government of the regulatory, supervisory and monetary policies of the MAS”. The central bank, as expected, is in charge of monetary policy. But it is also the one currently in charge of regulating cryptocurrency in Singapore, including coming up with guidelines for the crypto industry.

The Chairman of the Board of Directors, however, is appointed by the President on the recommendation of the Cabinet.

The president, therefore, can indirectly influence policy by selecting a president that aligns with him on certain topics, including cryptocurrency regulation. In this regard, this presidential election might prove important for the crypto industry.

Shanmugaratnam is no fan of cryptocurrencies per se, but he has indicated his willingness to discuss possible avenues for regulation and to let the government act as it sees fit in this space. The election of Tan would likely pose some problems, seeing as he already has significant misgivings about crypto.

Some good news for the industry, however, would be that Shanmugaratnam is the favourite in the upcoming elections.

However, several experts have also warned that the recent string of scandals involving high-ranking members of the ruling People’s Action Party may actually strengthen the anti-establishment vote in favour of Tan.

The role of President is largely regarded as ceremonial- but we should also be aware that the powers that they are granted may still prove significant. Thus far, Presidents have generally used their powers judiciously and with good reason.

But in a climate of political polarisation, we should not take that for granted- and this is why our vote matters. We are not only voting for a candidate that will represent us on the international stage, but also one that can potentially affect how Singapore is run- and that is something that we must carefully consider and account for as well.