The managing director of the Monetary Authority of Singapore, Ravi Menon, has said that facilitating cross-border settlements could emerge as one of the most important use cases with regards to crypto tokens. He said this during a speech delivered at a financial sector event. Menon also disclosed that Bank of Canada had partnered with the Singaporean central bank with a view to testing and developing a cross-border solution that would make use of crypto tokens that the two organizations will issue.
Earlier Menon had argued that despite the fact that crypto tokens do not deserve to be labelled currencies in the traditional sense of the word, it was possible that in future that could change. As a result of the increasing risks that are associated with virtual currencies Menon disclosed that the Monetary Authority of Singapore was keeping a watchful eye on various areas including money laundering and fundraising in order to ensure that they didn’t adversely affect financial stability.
In order to protect investors Menon repeated that particular crypto tokens that are qualified as securities should be regulated in the same way as similar assets. This meant that issuers of ICOs were required to meet the rules and laws governing securities prior to launching token sales. In addition the secondary markets which make it possible for ICO tokens to be traded need to seek registration and get the approval of the Monetary Authority of Singapore.
However Menon pointed out that the Monetary Authority of Singapore had no intentions of stifling blockchain technology by rolling out burdensome regulations.
Central bank cryptos
The comments by the managing director of the Monetary Authority of Singapore coincide with a global watchdog warning that in the event that central banks started issuing their own digital currencies, this would pose a rival to cash leading to the draining of funds from the traditional commercial banking system consequently leading to the rise of market interest rates.
“Even if designed primarily with payment purposes in mind, in periods of stress a flight towards the central bank may occur on a fast and large scale, challenging commercial banks and the central bank to manage such situations,” the report by Bank of International Settlements said.
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