This Central Bank Chief Predicts Native Digital Tokens Will 'Leave The Scene'

BY Benzinga | ECONOMIC | 11/28/23 11:32 AM EST

During a panel at the Hong Kong Monetary Authority-Bank for International Settlements event, Singapore's central bank leader Ravi Menon, forecasted a decline in private cryptocurrencies that don't meet essential financial service standards.
"Private digital coins have miserably failed the test of money because they can't keep value. Nobody keeps their life savings in these things. People buy and sell these things to make a quick buck," Menon said.

"Private cryptocurrencies which are native digital tokens don't meet that test, so I think that they will eventually leave the scene," he added.

Menon, who serves as managing director of the Monetary Authority of Singapore, also highlighted the shift towards stablecoins backed by high-quality government securities or cash, noting their potential for innovative applications due to their tokenized nature.
M. Rajeshwar Rao, Deputy Governor of the Reserve Bank of India, also shared insights at the event. 

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Central bank digital currencies (CBDCs) could gain popularity if they address unmet needs, utilize existing technology and infrastructure, and ensure data privacy and cybersecurity, Rao said. "Cybersecurity and resilience are also very critical issues that we will have to ensure so CBDC can be trusted as much as physical currency."

The Reserve Bank of India, which has already piloted a CBDC with about 2.75 million participants, is exploring its expansion to include interbank money market transactions.

Rao mentioned the ongoing work on enabling offline transactions and the need for more comprehensive strategies for implementing CBDCs on a multilateral basis.

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