MAS of Singapore sees prospects in the use of stablecoins

The chairman of MAS Singapore said he sees several options for using stablecoins, but such assets need to be regulated to combat “illegal financing”.

In a speech at the Asian Financial Forum on November 27, Tharman Shanmugaratnam, Chairman of the Monetary Authority of Singapore (MAS), supported the development of the stablecoin market. He stated that the use cases for stable cryptocurrencies could go beyond “pure speculation” and “illegal funding.”

Shanmugaratnam assigns a special role to stablecoins in traditional banking systems. However, he believes that such assets need to be regulated to combat their use for “illegal financing”:

“I think that in the future, regulated stablecoins will play an important role in the traditional payment system, which is being updated and become more efficient for cheap and fast international payments.”

The MAS chairman views cryptocurrencies as “financial technology”. However, calling such assets “currency” is, he said, silly, since their volatile prices make them unsuitable for legal tender. Shanmugaratnam believes that due to the high volatility, cryptocurrencies are best suited for speculative use.

“If you have an instrument whose price is volatile, it will never become money. It will be a speculative asset, ”he said.

Earlier, Aymeric Salley, CEO of stablecoin issuer SGD XSGD, stated that stable cryptocurrencies regulated by Singapore law have advantages over stablecoins issued in the United States. In September, the Central Bank of Singapore announced the launch of a pilot project to test the state cryptocurrency, and in August selected 15 companies to develop solutions for CBDC.