Singapore's monetary chief expects CBDCs operating alongside tokenized bank money to prevail after 'unstable private coins exit.'
Private cryptocurrencies lacking inherent value will likely fade away in the long run, predicted Singapore central banker Ravi Menon at a panel discussion today hosted by the Hong Kong Monetary Authority and Bank for International Settlements.
"Private digital coins have miserably failed the test of money because they can't keep value," stated Menon, Managing Director of the Monetary Authority of Singapore. "Nobody keeps their life savings in these things. People buy and sell these things to make a quick buck."
Menon sees future monetary systems involving three key components: central bank digital currencies (CBDCs), tokenized commercial bank liabilities, and stringently controlled stablecoins.
In Menon's vision, future stablecoins fully backed by high-quality government bonds or cash could enable innovative applications while maintaining stability, unlike volatile private cryptocurrencies.
Meanwhile, Reserve Bank of India’s Deputy Governor M. Rajeshwar Rao shared a positive outlook on CBDCs meeting unfulfilled user needs by employing existing tech infrastructure, while ensuring privacy and security.
The RBI seeks to expand the functionality of its CBDC pilot for offline payments. In the long term, Rao suggested considerations around transitioning from bilateral to multilateral CBDC mechanisms between central banks.
The discussions highlighted central bankers' preference for regulated digital currencies over privately issued cryptocurrencies in future monetary systems.
