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Monetary Authority of Singapore: "Сrypto investors are at risk of suffering significant losses"

Wed 10 Nov 2021 ▪ 14h57 ▪ 3 min read — by Susan McCormack

The Monetary Authority of Singapore (MAS) has issued a warning to retail investors. The authorities do not support cryptocurrencies as an investment asset for retail investors due to “sharp speculative movements” of digital asset rates, the document states.

Beware of speculative fluctuations

At the Singapore Financial Technology Festival MAS Managing Director Ravi Menon said that the Central Bank of Singapore “frowns on cryptocurrencies or tokens as an investment asset for retail investors.”

He added that “the prices of crypto tokens are not anchored on any economic fundamentals and are subject to sharp speculative swings. Therefore, Menon believes that “investors in these tokens are at risk of suffering significant losses.”

Menon has still noted that the regulator sees potential in blockchain and cryptocurrencies. For instance, digital assets can be used for fast and cheap international transactions.

Will we see CBDCs in Singapore?

Ravi Menon believes CBDCs to be irrelevant.

“Moving to a fully cashless society with all money in the form of bank deposits will not make a significant difference to the conduct of our monetary policy,” Menon explained.

MAS Managing Director sees CBDCs as “cash but in digital form”. With physical cash remaining in circulation, it is unclear whether a digital Singapore dollar is needed at all.

The fact that most Singaporeans already have bank accounts and the state’s electronic payments are affordable, efficient and competitive, brings out a question whether a CBDC can help further expand public access to financial services.

“The issuance of a retail CBDC is ultimately a socioeconomic rather than a monetary consideration,” Menon explained.

It is believed that the Singaporean e-dollar can protect the state against other countries’ CBDCs and private stablecoins, which might displace the local currency, yet, the Monetary Authority considers such a scenario very unlikely.

“There are neither strong reasons for or against a retail central bank digital currency (CBDC) in Singapore,” stated Menon.

Meanwhile, yesterday, on 9th November, Bitcoin (BTC) increased by 4.97% during the trading session reaching its record high of $68,519.

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Susan McCormack avatar
Susan McCormack

How many crypto nerds does it take to fork an altcoin? I may be a failed comedian, but crypto is no joke! I want to share my knowledge and help others to see the bright future ahead. #buybitcoin

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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