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- The managing director of the Monetary Authority of Singapore declared that cryptocurrencies have failed the test of digital money.
- Crypto will eventually leave the monetary scene, claimed Ravi Menon.
- Menon shared that the future of the monetary system will include CBDCs, tokenized bank liabilities, and well-regulated stablecoins.
“Cryptocurrencies have miserably failed the test of money because they can’t keep value,” said Ravi Menon, managing director of the Monetary Authority of Singapore. At a panel discussion on the Future of Monetary System as part of the Hong Kong Monetary Authority-Bank for International Settlements event, Menon stated that private cryptocurrencies will eventually exit the monetary system.
Bloomberg reported that Menon thought the future of the monetary system would include central bank digital currencies (CBDCs), tokenized bank liabilities, and well-regulated stablecoins.
In comparing cryptocurrencies with the aforementioned three, Menon stated that the prices of cryptocurrencies are subject to “sharp speculative swings,” and many investors have suffered significant losses in the crypto market.
Moreover, Menon added that people use cryptocurrencies “to make a quick buck.” In the realm of digital currencies, Menon announced that crypto will “eventually leave the scene.”
On the contrary, regulations are moving toward a system of stablecoins that are fully backed by the government. In a former event, Menon said that stablecoins, if well regulated, can potentially play a useful role as digital money. Menon added that MAS has granted in-principle approval under the Payment Services Act to three entities that will issue stablecoins that comply with the upcoming regulatory framework.
Meanwhile, Rajeshwar Rao, a deputy governor at the Reserve Bank of India, claimed that CBDCs can garner greater success if they meet unmet user expectations and needs. However, Rao shared a concern about data privacy, saying, “Cybersecurity and resilience are also very very critical issues that we will have to ensure so CBDC can be trusted as much as physical currency.”
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