Singapore’s well-meaning attempt at crypto regulation may not work out, given its skeptical approach to the asset class, Ethereum co-founder Vitalik Buterin said in an interview with The Straits Times on Nov. 20.
Buterin said he appreciates the city-state’s willingness to be supportive, but it could all be for nothing.
“I definitely appreciate the amount of effort that they have been putting into it, and just their willingness to explore many different kinds of applications and be supportive,”
Regulators worldwide want to be supportive of emerging technologies but also find cryptocurrencies “weird and scary” simultaneously, he said. The lack of understanding and fear of crypto makes regulators try and treat blockchain as a separate technology from crypto.
This is the case in Singapore, where regulators attempt to distinguish between blockchain usage and cryptocurrency. India is trying to adopt a similar approach, while some Chinese regulators have already attempted deploying blockchains that don’t use cryptocurrencies.
However, Buterin said there’s a “tight connection” between blockchain and crypto, such that “you can’t really have one without the other.” He added:
“I think some of the regulators in China definitely sort of tried to have one without the other and the reality is, if you don’t have cryptocurrency, then the blockchains that you’re going to have are just fake and nobody’s going to care about them.”
However, Singapore regulators are just trying to “discourage cryptocurrency speculation” without banning crypto outright, Buterin said. Although Singapore had earlier positioned itself as a crypto-friendly jurisdiction, it has started tightening regulations over recent months.
Besides, Buterin acknowledged that it could be “tough” for countries and regulators to reach a healthy balance between supporting new technologies without becoming a hotspot for bad crypto actors. But, when it comes to balancing crypto regulation, “there’s good ways to do it, and there are bad ways to do it,” he said