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Tharman Shanmugaratnam, the chairman of the Monetary Authority of Singapore commented that there could be “a role” for stablecoins in future finance “that extends beyond pure speculation and illicit finance”.
However, he focuses on some digital assets and not all the cryptocurrencies. He added that these digital assets need to be regulated for illicit finance activities including anti-money laundering.
The Singaporean central bank is keeping an ‘open mind’ on cryptocurrencies because the regulator wants technologies and innovation to develop, Tharman noted.
Singapore has already built its status as a crypto-technology hub and already has the legal framework for trading activities within the crypto-space.
This is particularly important for the nearby countries such as China that have taken a more hardline approach.
Stablecoins could help underserved citizens
The city of Singapore recently approved crypto dealing with the brokerage arm of DBS Bank Ltd. and the Australian cryptocurrency exchange, even as the regulator has been warning the public about the risks of trading digital assets such as Bitcoin.
Shanmugaratnam said he sees the future as one where regulated stablecoins will have a useful role in a traditional payment system that innovates and becomes more interoperable across borders for cheap, fast and instant payments.
However, he refused to use the word ‘crypto’, and said he prefers to approach the topic through a “fintech lens”, whereby such technologies have the potential to help largely underserved users.
He also asserted he doesn’t see Singapore copying El Salvador with cryptocurrencies replacing money as legal tender given their volatile and speculative nature.
“If you have an instrument that is volatile in pricing, it’s never going to become money. It’s going to be a speculative asset, for both the wise and foolish,” he commented.