According to Yahoo News, Singapore's central bank chief has stated that private cryptocurrencies that fail to meet the fundamental requirements of a financial service will eventually exit the monetary scene. Ravi Menon, Managing Director of the Monetary Authority of Singapore, made this prediction during a panel discussion on the Future of Monetary Systems at the Hong Kong Monetary Authority-Bank for International Settlements event.
Menon emphasized that private cryptocurrencies, often referred to as native digital tokens, have failed to establish themselves as a reliable store of value, leading to their eventual departure from the monetary system. He noted that individuals do not store their life savings in these currencies, instead using them for speculative trading and quick profit-making schemes.
In contrast, Menon expressed optimism towards the future of stablecoins, which are digital currencies pegged to traditional assets like fiat currencies or commodities. These stablecoins, when fully backed by high-quality government securities or cash, can function as narrow money, similar to physical currency. Menon highlighted the advantage of stablecoins being in token form, facilitating innovative applications and advancements.
Another panelist, M. Rajeshwar Rao, a deputy governor at the Reserve Bank of India, emphasized the importance of central bank digital currencies (CBDCs) in addressing unmet user needs and leveraging existing technology and infrastructure. He acknowledged the concerns surrounding data privacy, cybersecurity, and resilience, stressing the need to address these issues to gain public trust in CBDCs. The Reserve Bank of India is among a few central banks that have launched a CBDC on a pilot basis, with an impressive 2.75 million participants so far. Rao envisions a future where CBDCs play a broader role, including interbank money market transactions.