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The size of the cryptocurrency market in Singapore remains small, Senior Minister Tharman Shanmugaratnam said on Monday.
The combined peak daily trading volume of three major cryptocurrencies quoted in Singdollar - bitcoin, ethereum and XRP2 - was 2 per cent of the average daily trading volume of securities on the Singapore Exchange in 2020, he pointed out.
Mr Tharman, who is also the Monetary Authority of Singapore (MAS) chairman, was responding to questions in Parliament on the crypto asset market in Singapore and how these exchanges are regulated.
Cryptocurrencies such as bitcoin, which may be used for payment purposes, are one of two common types of crypto assets, said Mr Tharman. They can be highly volatile as their value is typically not related to economic fundamentals, he added.
"They are hence highly risky as investment products, and certainly not suitable for retail investors," said Mr Tharman, who noted that MAS had issued numerous consumer advisories to warn the public of the risks of trading these products.
Securities tokens, which are digital representations of traditional securities such as shares and bonds, are another common type of crypto assets.
Mr Tharman said the size of the securities tokens market is also small in Singapore. Only three of the more than 60 recognised market operators currently regulated by MAS under the Securities and Futures Act offer the trading of securities tokens. Trading volumes are very small.
Recognised market operators are also not allowed to offer their products to retail investors.
The Straits Times
