Singapore says no strong case to ban cryptocurrency trading

SINGAPORE: Singapore's central bank has been studying the potential risks posed by cryptocurrencies, but there is as yet no strong case to ban trading of the digital coins in the city-state, Deputy Prime Minister Tharman Shanmugaratnam said.

"Cryptocurrencies are an experiment. The number and different forms of cryptocurrencies is growing internationally. It is too early to say if they will succeed," Mr Shanmugaratnam said.

"If some do succeed, their full implications will also not be known for some time," he said in a written answer to questions from MPs on banning the trading of bitcoin or cryptocurrency.

"The Monetary Authority of Singapore has been closely studying these developments and the potential risks they pose. As of now, there is no strong case to ban cryptocurrency trading here."

Bitcoin plunged more than 20 per cent to fall below US$6,000 (S$7,900) yesterday, its latest sharp loss following a series of setbacks, with a global stock market collapse fuelling the selling.

The collapse comes just six weeks after bitcoin hit a record high of US$19,511, fuelled by speculators looking to make a quick buck.

The cryptomarket - which includes dozens of other units - has been pounded by news of crackdowns by governments including in China, Russia and South Korea, one of its biggest markets.

Last Thursday, India said it would "take all measures to eliminate" cryptocurrencies' use as part of its payment system and in funding illegitimate activities, while the Japanese authorities raided a virtual currency exchange after it lost US$530 million to hackers.

Central banks in Europe, Japan and the US have also flagged concerns about the unit.

This week, several commercial lenders said they will stop allowing customers to buy bitcoin through their credit cards owing to debt concerns. - AFP, REUTERS