- Ravi Menon, Singapore central bank managing director, predicts most private cryptocurrencies will fail as they lack stability and regulation
- Menon foresees future monetary system consisting of 3 components: central bank digital currencies, tokenized bank liabilities, and well-regulated stablecoins
- While open to stablecoins with oversight, Menon believes central bank digital currencies have high chance of adoption
Ravi Menon, the managing director of Singapore’s central bank, recently shared his predictions for the future of private cryptocurrencies at a conference in Hong Kong. His comments provide insight into how central bankers view decentralized digital assets.
Menon Predicts Most Private Cryptos Will Fail
Menon stated that private cryptocurrencies that do not meet the fundamental requirements of financial services will eventually disappear from the monetary system. In his view, cryptocurrencies that are not well-regulated and lack stability will not survive long-term.
Three Key Components of the Future Monetary System
Looking ahead, Menon foresees the future monetary system consisting of three main components:
- Central bank digital currencies (CBDCs)
- Tokenized bank liabilities
- Well-regulated stablecoins
CBDCs Have High Chance of Adoption
Menon believes central bank digital currencies have a strong likelihood of being implemented. CBDCs would be government-backed digital forms of fiat currency. An Indian central banker shared Menon’s optimism about CBDCs during the conference.
Stablecoins Need Proper Oversight
While Menon is open to stablecoins playing a role, he emphasized the importance of robust regulation. Stablecoins peg their value to an asset like the U.S. dollar to minimize volatility. However, recent stablecoin crashes have underscored the need for proper oversight.
Conclusion
Menon’s perspective highlights that central bankers see serious limitations with existing cryptocurrencies. He expects private cryptocurrencies without adequate regulation or stability mechanisms to disappear over time. Instead, he anticipates CBDCs and tokenized traditional assets dominating the future monetary system. However, properly regulated stablecoins could still have a place in his view.
