- Ravi Menon slammed cryptocurrencies as poor forms of money.
- The MAS director singled out centralized alternatives as more practical.
- Menon’s comments highlight the growing divide between centralized and decentralized systems.
Long seen as an Asian crypto hub, Singapore has carefully cultivated a reputation as a crypto-friendly financial center. Rather than taking a dismissive stance, the Monetary Authority of Singapore (MAS) has engaged with crypto companies to develop thoughtful oversight tailored to digital asset risks, such as greenlighting the recent “Project Guardian” tokenization test pilot.
Yet this openness to cryptocurrency and blockchain makes MAS managing director Ravi Menon’s sharp comments all the more surprising. During a recent Bank for International Settlements event in Hong Kong, Menon declared that private cryptocurrencies, such as Bitcoin, “have miserably failed the test of money.”
Bitcoin, Private Cryptos Aren’t Money, Warns Menon
At the heart of Menon’s critique on the failings of private cryptocurrencies as money lies the issue of volatility and price instability. “They can’t keep value,” slammed Menon, adding that “nobody keeps their life savings” in cryptocurrencies due to their highly volatile nature.
Based on the belief that cryptocurrencies are a poor store of value and medium of exchange, the MAS managing director took a further swipe by predicting the eventual demise of cryptocurrencies.
Outlining his vision for what a sound monetary system should look like, Menon sees fully backed, well-regulated stablecoins, “tokenized bank liabilities,” and central bank digital currencies (CBDCs) as superior forms of money over cryptocurrencies.
Singapore’s CBDC Trial Continues
Menon’s positive outlook on CBDCs aligns with Singapore’s recent move to advance its CBDC program. Earlier this month, Menon announced that MAS will proceed with a test pilot for wholesale settlement between commercial banks using the digital Singapore dollar.
In 2022, MAS stated there was no immediate use case for a retail CBDC after analyzing the trial data. The regulator cautioned over the risks and uncertainties of introducing a new currency, particularly when the existing digital payment network already serves Singapore well.
On the Flipside
- The battle between private crypto and CBDCs ties into a broader debate over financial control and independence.
- US Congressman Tom Emmer has proposed anti-CBDC legislation that would “protect individual liberty and prevent threats of government coercion” through the money system.
- Low usage in Nigeria and India points to a lack of interest in CBDCs from the general public.
Why This Matters
Menon’s comments underline the growing divide between centralized state digital currencies and decentralized crypto. While CBDCs currently enjoy regulatory favor, public support is another matter. As Singapore’s trial showed, CBDCs offer little benefit over existing payment rails, making a compelling use case for their widespread adoption doubtful.
Learn more about the Monetary Authority of Singapore’s latest crypto guidelines here:
Singapore Unveils Strengthened Regulations For Digital Assets
Find out Tether USDT’s growing dominance of the stablecoin market here:
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