Should there be more regulation of digital currencies?
The Economy
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How should Singapore manage the impacts of increasing protectionism on its economy?
Digital currency, which is known as digital money or electronic money, exists solely in a virtual form. They take the form of cryptocurrency, central bank digital currency, and virtual currencies. Today, the proliferation of digital currencies is attributed to advancements in technology that have strengthened digital asset ecosystems, increased global investment in innovation, and the accessibility provided by more decentralised platforms. However, the rapid growth of digital assets has exacerbated the problem of inadequate regulatory oversight, and introduced new risks such as cyber theft, data protection, fraud, and illicit money laundering. Despite these issues, as a key hub for digital currency innovation, Singapore has supported experimentation with wholesale central bank digital currency (CBDC), digital payment, and blockchain technology, becoming a global destination for digital asset business.
However, with recent exponential crypto market declines, the collapse of major crypto firms, and high-profile money laundering cases, there is a pressing need for clearer safeguards and reinforced rules. Within Singapore, concerns about cybersecurity risks, market volatility, and regulatory uncertainty which impacts long-term credibility in the financial system make these issues even more pressing. Examining how Singapore can improve digital currency regulation is therefore important. Singapore must find a balance between supporting innovation, safeguarding public interest, and strengthening its adaptability in a rapidly evolving environment.
Image drawn by Aurelia Keisha Rahman
Image drawn by Aurelia Keisha Rahman
Singapore is among the most trade-dependent economies in the world. Lacking natural resources and having a small domestic market, Singapore adopted an outward-oriented development strategy centred on openness, connectivity, and integration into global value chains. Over time, this model transformed the country into a manufacturing, logistics, and financial hub, attracting multinational corporations (MNCs) and facilitating trade flows far beyond its geographic location. Singapore’s prosperity is inseparable from the assumption that goods, capital, and services can move relatively freely across borders. However, rising protectionism worldwide poses a threat to Singapore’s continued success. This challenge is further intensified because Singapore has to balance being neutral with regards to global and regional conflicts while simultaneously preserving its market access and economic stability within a rapidly polarising geopolitical environment. Representatives are given the opportunity to discuss how Singapore navigates an increasingly fragmented world, and whether Singapore can continue to turn global uncertainties into opportunities.
