Singapore Central Bank Chief Predicts Private Cryptocurrencies Will Exit Monetary Scene

According to Yahoo News, private cryptocurrencies that fail to meet the fundamental tests of financial services will eventually exit the monetary scene, as stated by Singapore's central bank chief. This will result in a future monetary system consisting of three main components: central bank digital currencies, tokenized bank liabilities, and well-regulated stablecoins, according to Monetary Authority of Singapore's Managing Director Ravi Menon. He spoke at a panel discussion on the Future of Monetary System during the Hong Kong Monetary Authority-Bank for International Settlements event. Menon highlighted that private digital coins have failed the test of money as they cannot maintain value, and people do not keep their life savings in them. Instead, they are used for quick profit-making transactions. He believes that private cryptocurrencies, which are native digital tokens, will eventually leave the scene. In contrast, regulators are moving toward a system of stablecoins that are fully backed by high-quality government securities or cash, allowing them to be used like narrow money. Menon emphasized the advantage of stablecoins being in token form, which can be used for various innovative applications. M. Rajeshwar Rao, a deputy governor at the Reserve Bank of India, also spoke at the panel, stating that central bank digital currencies will have greater success if they meet unmet user needs and are implemented using accessible existing technology and infrastructure. He mentioned concerns about data privacy, cybersecurity, and resilience, which need to be addressed for CBDCs to be trusted as much as physical currency. The Reserve Bank of India is among a few central banks that have launched a CBDC on a pilot basis, with about 2.75 million participants so far. Rao sees the potential for the central bank digital currency to be expanded further to include interbank money market transactions.