In a panel discussion today hosted by the Hong Kong Monetary Authority and the Bank for International Settlements, Singapore Central Bank Governor Ravi Menon spoke about the possibility of private cryptocurrencies lacking intrinsic value disappearing in the long term. It was predicted that this would be high.
“Private digital coins fail the currency test miserably because they cannot hold value.” Menon, Managing Director of the Monetary Authority of Singapore, said: “No one is saving their life on these things. People are buying and selling these things to make a quick buck.”
Menon sees the future monetary system involving three key components: central bank digital currencies (CBDCs), tokenized commercial bank debt, and tightly 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 highly volatile private cryptocurrencies.
Meanwhile, Reserve Bank of India Deputy Governor M. Rajeshwar Rao shared a positive outlook on CBDCs that leverage existing technology infrastructure to meet unmet user needs while ensuring privacy and security.
RBI seeks to expand CBDC pilot functionality for offline payments. In the longer term, Rao suggested consideration of moving from a bilateral CBDC mechanism between central banks to a multilateral CBDC mechanism.
The discussion highlighted central bankers’ preference for regulated digital currencies over privately issued cryptocurrencies in future monetary systems.