Singapore’s central bank chief, Ravi Menon has expressed his prediction about the exit of private cryptocurrencies that fall short in key financial aspects.
Ravi Menon, Managing Director of the Monetary Authority of Singapore, envisions a future with three main components: central bank digital currencies, tokenised bank liabilities, and “well-regulated” stablecoins.
Speaking at a panel discussion in Hong Kong, Menon emphasized the limitations of private digital coins, asserting their inability to maintain value or serve as a repository for life savings.
Contrary to private cryptocurrencies, regulatory momentum is leaning towards stablecoins backed by high-quality government securities or cash.
Menon sees their tokenised nature as a versatile tool for innovative applications.
Incidentally, this year will also be Menon’s last year as director of the MAS.
A parallel sentiment is echoed by a senior official from the Reserve Bank of India, M. Rajeshwar Rao, who emphasizes that central bank digital currencies (CBDCs) must meet user needs and leverage existing technology for success.
Rao acknowledges concerns about data privacy and cybersecurity, essential for CBDCs to gain the trust equivalent to physical currency.
The Reserve Bank of India, among the pioneers in CBDC exploration, has launched a pilot with approximately 2.75 million participants.
Rao envisions extending CBDC use to interbank money market transactions, calling for thoughtful expansion beyond bilateral relationships.