EVENT COVERAGE: SINGAPORE FINTECH FESTIVAL Tokenised assets, stable coins central to Singapore’s crypto hub ambitions

Collaboration is key to achieving financial goals, says MAS’ Ravi

Singapore touts a future as a crypto hub—not for cryptocurrency, but rather for the use and adoption of tokenised assets and stable coins, a central bank official said.

“If a crypto hub is about experimenting with programmable money, yes we want to be a crypto hub. If it is about applying digital assets for use cases like atomic settlement, yes we want to be a crypto hub,” Ravi Menon, Managing Director of the Monetary Authority of Singapore, told attendees of the Singapore Fintech Festival 2022. “If it is about tokenising real and financial assets to increase efficiency and reduce risks in financial transactions, yes we want to be a crypto hub. But if it is about trading and speculating in cryptocurrencies, that is not the kind of crypto hub we want to be.”

Menon, who delivered the event’s keynote speech for its second day, named tokenised assets as “most promising” in helping the financial markets attain instant settlements, and in improving both the efficiency and accessibility of financial services.

“If I can summarise, MAS is essentially: discouraging retail investment in cryptocurrencies; facilitating stablecoins through sound regulation; allowing tokenised bank deposits; and experimenting with CBDCs,” he stated.

Stable coins

Menon firmly reiterated Singapore’s discouragement of retail investments in cryptocurrencies, calling the medium a “non-starter.”

“They have performed poorly as a medium of exchange and value,” Menon told attendees of the Singapore Fintech Festival 2022, where he delivered the opening address on the second day of the event. Menon was more open to stable coins, sharing that Singapore is more open to facilitating it so long they “meet a standard.”

“If well regulated and securely

Menon.

backed by reserves, they combine the benefits of stability and programmability. But pervasive take up remains to be seen,” he said.

Programmable money

Menon spoke at length about the advantages of programmable money or money where rules of the exchange are embedded in the money itself. These rules are retained even when the money is transferred.

As an example, Menon cited donations, where the money sent can be programmed to only be used for the intended purpose.

“With programmable money, we can have better assurance that donations reach their intended beneficiaries and the funds are used for their intended purposes. We can programme the beneficiaries and purposes into the money itself,” he said.

Menon also floated the possible use of tokenised bank deposits and central bank digital currencies or CBDCs for this, apart from stable coins.

For their part, Singapore has already launched Project Orchid, which introduced the concept of purpose-bound money. Under Project Orchid, senders may programme money to be used only for a specific thing by the receiver, Menon said.

Apart from programmable money, real-time settlements, and tokenised assets, instant remittance and atomic settlements are two of the five desired outcomes that fintech collaborations in Singapore are reportedly trying to solve, according to Menon, who shared that Singapore is working to link its real-time payments service PayNow service to Malaysia’s DuitNow and India’s UPI.

Atomic settlements, or a realtime settlement payment system, remain an issue for all. Currently, it