Menon highlighted the volatility and failure of cryptocurrencies as a form of digital money during his address at the festival. He proposed several alternatives that could serve as more reliable and efficient financial instruments. Among these were privately issued digital currencies, central bank digital currencies (CBDCs), tokenized bank liabilities, and particularly stablecoins. He pointed out wholesale CBDCs and tokenized bank liabilities as promising options for atomic settlement—a method that ensures transactions are completed only when all parts of an exchange are fulfilled.
The MAS director detailed Singapore’s strategic initiatives aimed at improving cross-border payments, facilitating seamless transactions with digital assets, and creating a trusted data ecosystem to support sustainable finance and the transition to net-zero emissions. Menon called for international cooperation to help shape a forward-looking financial landscape.
In a related development, MAS is spearheading Project Guardian in collaboration with industry partners. This project focuses on advancing the tokenization of various financial assets such as foreign exchange, bonds, and funds. The initiative aims to enhance global liquidity and promote financial interoperability.
Meanwhile, Germany’s Commerzbank (ETR:CBKG) has achieved a significant milestone in cryptocurrency adoption by securing a crypto asset custody license under the German Banking Act. This move is indicative of a growing trend among European banks responding to increasing customer demand for digital assets.
The contrasting approaches of Singapore’s cautious endorsement of specific digital finance tools and Germany’s embrace of cryptocurrency services illustrate the varied strategies global financial institutions are adopting in navigating the evolving landscape of digital finance.
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Source: Cryptocurrency - investing.com
