Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS), asserted that cryptocurrencies have fallen short as digital money, lacking stability as a medium of exchange or store of value.
“In Menon’s opinion, cryptocurrencies have failed the test of digital money because they have performed poorly as a medium of exchange or store of value, their prices are subject to sharp speculative swings, and many investors in cryptocurrencies have suffered significant losses,” he stated during his keynote at the Singapore Fintech Festival.
MAS favours well-regulated stablecoins, viewing them as a promising complement to CBDCs and tokenized bank liabilities. “Stablecoins – if well regulated – can potentially play a useful role as digital money alongside CBDCs and tokenized liabilities,” Menon emphasized.
Despite Singapore’s crypto-friendly reputation, regulators aim to redefine the nation as a digital assets hub. Menon emphasized the broader applications of technology beyond crypto speculation.
“Together, digital assets, digital money, and a foundational digital infrastructure can help realize the vision of seamless financial transactions across the world,”
Project Guardian, led by MAS, focuses on tokenizing foreign exchange, bonds, and funds. The initiative aims to enhance global liquidity, streamline cross-border transactions, and improve efficiency in financial markets through trials involving major global banks. “A larger vision that is emerging is of a network of interoperable systems that allows payment, clearing, and settlement to take place instantaneously and seamlessly,” Menon explained.
“To address challenges faced by existing digital asset networks, MAS is launching the Global Layer One (GL1) initiative. ‘GL1 is conceived as a global public good,’
‘It will facilitate seamless cross-border transactions and enable tokenized assets to be traded across global liquidity pools while meeting relevant regulatory requirements.'”
Despite Menon’s critical remarks on crypto, MAS expresses enthusiasm for tokenization and digital assets. The announcement includes in-principle approvals for various initiatives, such as StraitsX SGD Issuance, StraitsX USD Issuance, Paxos Digital Singapore, and the next phase of Project Greenprint, streamlining ESG through technology and data.