Ravi Menon, the departing head of the Monetary Authority of Singapore (MAS), has expressed skepticism about private cryptocurrencies, declaring that they have fundamentally failed as digital money and are likely to face a decline in the near future. Menon reiterated his stance during a speech at an event hosted by Hong Kong’s central bank, echoing comments made earlier this month at the Singapore Fintech Festival 2023.
Menon highlighted three key shortcomings of private cryptocurrencies. Firstly, he emphasized that they have “miserably failed the test of money” due to their inability to retain value. Additionally, Menon pointed out that the prices of private cryptocurrencies are susceptible to sharp speculative swings, resulting in substantial losses for many investors.
Despite his critical assessment of private cryptocurrencies, Menon expressed a more optimistic outlook for stablecoins and tokenization. The MAS recently granted in-house approval to three companies issuing stablecoins: StraitsX SGD Issuance, StraitsX USD Issuance, and Paxos Digital Singapore.
In a noteworthy initiative, MAS’s Project Guardian has initiated several pilots related to tokenization in collaboration with prominent partners such as Citi, JP Morgan, and asset manager Apollo. While casting doubt on the viability of private cryptocurrencies, Menon appears confident in the potential and regulatory advancements surrounding stablecoins and tokenization within the evolving financial landscape.