Singapore’s central bank chief Ravi Menon sees private cryptocurrencies failing: ‘they will eventually leave the scene’

Ravi Menon says a future monetary system will comprise a central bank digital currencies, tokenised bank liabilities and ‘well-regulated” stablecoins’

Singapore’s central bank chief believes regulators are moving toward a system of stablecoins that are fully backed by high-quality government securities or cash

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Ravi Menon, the head of Singapore’s central bank believes private cryptocurrencies will fail. Photo: Bloomberg

Published: 5:35pm, 28 Nov 2023

Private cryptocurrencies that failed the fundamental tests of financial services will eventually exit the monetary scene, according to Singapore’s central bank chief.

That will leave a future monetary system made up of three key components: central bank digital currencies, tokenised bank liabilities and “well-regulated” stablecoins, Monetary Authority of Singapore’s Managing Director Ravi Menon said in Hong Kong on Tuesday.

Private digital coins “have miserably failed the test of money because they can’t keep value,” Menon said at a panel discussion on the Future of Monetary System as part of the Hong Kong Monetary Authority-Bank for International Settlements event.

“Nobody keeps their life savings in these things. People buy and sell these things to make a quick buck.”

“Private cryptocurrencies which are native digital tokens don’t meet that test, so I think that they will eventually leave the scene,” he said.

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 said. “The beauty is it’s in token form and it can be used for variety of innovative applications.”

Meanwhile, a top Indian central banker said he sees central bank digital currencies enjoying greater success if it meets unmet user needs, and is implemented using accessible existing technology and infrastructure.