On August 10, Monetary Authority of Singapore (MAS) managing director, Ravi Menon, discussed several monetary and economical topics, including the Federal Reserve's monetary policy, China's growth, the global economy, and digital currencies, on which he was asked whether money should remain the preserve of central banks, reported Central Banking.
- Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS)
According to Menon:
"Virtual currencies have a role to play, but I doubt they will replace the fiat money that central banks issue – but I could be wrong."
This statement was supported by the decentralized nature of virtual currencies and the fact that they weren't backed by any central bank. Regarding volatility, the executive added:
"If the value of this virtual money fluctuates a great deal, it does not meet the basic requirement of money as a store of value."
Menon recognized the opportunities and potential of the technology, noting they were cost efficient and allowed fast transfers. However, the executive shared his concerns about the danger of money laundering and terrorism-financing risk "because of the anonymity in virtual currency transactions."
To prevent the risks, Menon reminded of the MAS's intentions to build a regulatory framework for digital currencies intermediaries. The regulation will apply AML/CFT (anti-money laundering and countering the financing of terrorism) Singaporean regime, said the executive.
However, Menon stressed that regulations shouldn't hamper the development of digital currencies:
"While there is reason to be cautious about the risks, we have chosen to address these risks in a targeted way so that innovation can continue to take place."
Last December, the city-state central bank announced that it wouldn't interfere with Bitcoin services, stating: "Whether or not businesses accept Bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene".
However, in March, Singaporean officials decided to regulate digital currencies by adding them to the laws that cover money laundering through "virtual commodities".
In Singapore, Bitcoin acceptance has been increasing during the past year and the bustling startup scene has even formed an organization (ACCESS) aimed at facilitating Bitcoin’s expansion in Singapore through dialogue with the government.
- Coinmap, Singapore
So far, the city-state counts 8 Bitcoin ATMs and one cash-out cable ATM, and it is estimated that more than 30 physical retailers and brick-and-mortar businesses are currently accepting payments in bitcoins, according to CoinMap. These businesses cover different and various activity sectors from food and fashion, to photography and technology.
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