The President of the Central Bank of Singapore said that there are times when cryptocurrencies are the best option - especially stablecoins.
Banks and government officials globally are welcoming cryptocurrencies more than ever. Tharman Shanmugaratnam, President of the Central Bank of Singapore, recently stated that cryptocurrencies have a place in the country's financial sector. All that is needed now is some regulation to prevent illicit financing.
The place for stablecoins
Mr. Tharman showed support at the Asian Financial Markets Forum on Wednesday. He said that financial technology can create "pure speculation" and "illegal finance" activities.
The President who cares the most is stablecoins and he believes it has an important role in the traditional financial system. However, he acknowledged that those assets must be managed to combat their use for "illegal financial activity".
This seems to be the general view of regulators. Fedm Chairman Jerome Powell said he not only has no intention of banning cryptocurrencies, but is also very interested in how stablecoins are used. Likewise, Chairman SEC Gary Gensler has called stablecoins 'poker chips' in casinos.
However, for Tharman, stablecoins offer great economic benefits, despite the risks associated with them.
“I think that in the future, regulated stablecoins will play a useful role in reforming the traditional payment system and becoming a cheap, fast and instant international payment method,” he said.
The central bank says it remains positive towards cryptocurrencies in terms of technological innovation. Singapore has recently been aiming to build the country as a hub for crypto technology. The survey in the summer shows that half of Singapore's population owns cryptocurrency.
Fintech not Crypto
The Chairman refrained from using terms such as “cryptocurrency” or “cryptocurrency” but instead used the term “Fintech” (financial technology). He sees that financial technologies are expanding financial services to the unbanked and improving the traditional financial system.
However, calling these assets “currency” is unwise because their volatility is not suitable as a medium of exchange.
Specifically, he said, “If you have something whose price is easily changed, it never becomes money. It will be a speculative asset.”