Private cryptocurrencies have not met the fundamental criteria for digital money and are expected to decline in popularity soon.
Ravi Menon, the outgoing head of the Monetary Authority of Singapore (MAS), expressed this perspective during a speech at an event organized by Hong Kong’s central bank. He reiterated points made earlier at the Singapore Fintech Festival 2023, highlighting three key failings of private crypto. Firstly, he stated that they have “miserably failed the test of money because they can’t keep value.”
Menon noted that the prices of cryptocurrencies are prone to dramatic speculative fluctuations, leading to substantial losses for many investors.
Despite his strong criticism of private cryptocurrencies, Menon expressed optimism regarding stablecoins and the potential of tokenization. The MAS has recently approved three firms for issuing stablecoins: StraitsX SGD Issuance, StraitsX USD Issuance, and Paxos Digital Singapore.
Additionally, the regulator’s Project Guardian initiative has launched several pilots focused on tokenization, collaborating with partners such as Citi, JP Morgan, and asset manager Apollo.