Private cryptocurrencies that failed the fundamental tests of financial services, such as Bitcoin (BTC) and Ethereum (ETH), will exit the monetary scene, as per Singapore’s central bank chief, Ravi Menon.
That will leave a future monetary system made up of three key components: central bank digital currencies, tokenized bank liabilities, and “well-regulated” stablecoins. Managing Director of the Monetary Authority of Singapore, Ravi Menon, stated this on Tuesday in Hong Kong.
Menon stated that private cryptocurrencies “have miserably failed the test of money because they can’t keep value.” during a panel discussion about the monetary system's future on November 28, 2023. “Nobody keeps their life savings in these things. People buy and sell these things to make a quick buck.”
A regulatory framework aimed at improving the stability of single-currency stablecoins was unveiled by the Monetary Authority of Singapore. Menon stated that “The beauty is it’s in token form and it can be used for a variety of innovative applications.”
This framework includes requirements for capital, redemption at par, value stability, and audit result disclosure. The framework states that only stablecoin issuers who fulfill all requirements may submit an application to the Monetary Authority of Singapore (MAS) in order to have their stablecoins recognized and designated as "MAS-regulated stablecoins."
A prominent central banker in India, however, predicted that digital currencies issued by central banks would be more successful if they addressed unmet user needs and were implemented with easily accessible infrastructure and technology.
“Data privacy is a concern. Cybersecurity and resilience are also very critical issues that we will have to ensure so CBDC can be trusted as much as physical currency,” M. Rajeshwar Rao, a deputy governor at the Reserve Bank of India, said at the same panel. The regulator is also working on the facilitation of offline transactions. The regulator is also attempting to make offline transactions easier.
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