Private cryptocurrencies have no role in Singapore’s monetary landscape, says head of central bank.
Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS), has stated that private cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) will not have a place in the future monetary system. According to Menon, these cryptocurrencies fail the “fundamental tests of financial services,” particularly when it comes to maintaining value.
During a panel discussion on the Future of Monetary System on November 28, 2023, Menon emphasized that private cryptocurrencies have not been able to meet the requirements of being a reliable form of money. While he did not explicitly mention which cryptocurrencies will be banned, Menon hinted that the future monetary system will rely on central bank digital currencies (CBDCs), tokenized bank liabilities, and well-regulated stablecoins.
Menon’s remarks align with Singapore’s recent efforts to regulate stablecoins. In mid-November 2023, the MAS introduced a regulatory framework aimed at enhancing the stability of single-currency stablecoins. This framework includes guidelines on value stability, capital, redemption at par, and disclosure of audit results. Only stablecoin issuers that meet these criteria can apply to the MAS for recognition and designation as MAS-regulated stablecoins.
Furthermore, Singapore’s financial regulator is planning to launch a live pilot of a CBDC for wholesale interbank settlements in 2024. This initiative is part of the Orchid Blueprint, which was developed by the MAS specifically for this purpose.
Overall, Singapore is paving the way for CBDCs and regulated stablecoins while excluding private cryptocurrencies that do not meet the necessary standards. These measures aim to ensure the stability and reliability of the future monetary system.
