Monetary Authority of Singapore managing director Ravi Menon said that cryptocurrencies have failed the «test of digital money» and that the future of electronic fiat belongs in other forms.

Not unlike other financial centers, Singapore has been exploring crypto-related opportunities in recent years with mixed results. While it has managed to attract businesses to set up in the Southeast Asian hub, it has also seen its fair share of negative headlines such as the collapse of crypto hedge fund Three Arrows Capital. 

«Cryptocurrencies have failed the test of digital money,» said Monetary Authority of Singapore (MAS) managing director Ravi Menon at this week’s Singapore FinTech Festival 2023. «They have performed poorly as a medium of exchange or store of value. Their prices are subject to sharp speculative swings. Many investors in cryptocurrencies have suffered significant losses.»

Four Contenders

According to Menon, there are currently only four contenders for digital money: privately issued cryptocurrencies, central bank digital currencies (CBDC), tokenized bank liabilities and well-regulated stablecoins.

«Wholesale CBDCs and tokenized bank liabilities can play the role of digital money and help to achieve atomic settlement,» he noted.

Three Outcomes

Menon's comments were part of a speech outlining some of the Singapore regulator’s broader plans, including three key outcomes for the city-state’s role as a financial hub.

Firstly, MAS aims to make cross-border payments cheaper, faster, and more efficient. Secondly, it aims to enable financial assets to be transacted seamlessly through digital assets, digital money and interoperable digital networks. Thirdly and finally, it looks to foster a trusted data and disclosure ecosystem to support sustainable finance and the net-zero transition.

«Our goal is nothing short of audacious: to collaborate with the financial industry and international partners to shape the financial ecosystem of the future,» Menon added.