Cryptocurrency Crash? MAS Chief Ravi Menon Hopes Blockchain Will Survivebr>
Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS), hopes that blockchain technology will not be affected if there is an eventual crash in the price of cryptocurrencies.
Singapore’s central bank is among many global regulators voicing concern about the risks in investing in cryptocurrencies such as bitcoin. But it is exploring the use of distributed ledger technology (DLT) for clearing and settlement of payments and securities.
At a UBS Wealth Insights event in Singapore, Menon said, “I do hope when the fever has gone away, when the crash has happened, it will not undermine the much deeper and more meaningful technology associated with digital currencies and blockchain.”
Menon was also asked about the possibility of a central bank issued cryptocurrency for the public. He said that he would not rule out the possibility, but wasn’t sure if it was a good idea.
“I can’t see why you’d want to do that, because that completely disintermediates the banks,” he said.
Last month, MAS advised the public to act with extreme caution and understand the significant risks they take on if they choose to invest in cryptocurrencies. It said it was “concerned that members of the public may be attracted to invest in cryptocurrencies, such as bitcoin, due to the recent escalation in their prices.” The central bank maintained that cryptocurrencies are not legal tender and are not backed by any asset or issuer.
In October of last year, the central bank completed Project Ubin’s Phase 2 and successfully produced three source-codes on blockchain software prototypes for inter-bank payments for public access. Led by MAS, Project Ubin aims to help the banking industry better understand the technology and the potential benefits it may bring through practical experimentation.