Tokenised assets, stable coins central to Singapore’s crypto hub ambitions

Collaboration is key to achieving finance goals, says MAS’ Ravi Menon.

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.

Ravi Menon, managing director of the Monetary Authority of Singapore, 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.

Menon firmly reiterated Singapore’s discouragement on retail investments to 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 during 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 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.

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

Menon 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 in a specific thing by the receiver, Menon said.

Instant remittance, settlement
Apart from programmable money 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. 

Singapore is working to link its real-time payments service PayNow service to Malaysia’s DuitNow and India’s UPI, Menon shared.

Atomic settlements, or a real-time settlement payment system, remains an issue for all. Currently, it takes at least two days for funds to be transferred from bank to bank. On this end, Menon expressed hopes that tokenised assets will help simultaneous exchange of funds—both remittance-wise and settlement-wise—using a distributed ledger.

The green data problem
The last desired outcome i access to trusted sustainable data, with Menon expressing Singapore’s aim of creating a trusted data ecosystem, in part through collaboration with fintechs

“We need fintechs to do the sustainability space what it is doing to the inclusion space. We need green fintech,” Menon said, adding that collaboration is the essential feature that Singapore needs to achieve its five desired outcomes.

Singapore has also launched Project Greenprint to kickstart in this goal. The project aims to streamline the collection, access, and use of climate sustainability data through the launch of the ESG disclosure portal called ESGenome, as well as an ESG Registry for green certifications.