Singapore nearer to regulatory-nod for ‘virtual currency’?

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Bitcoin to become a World Reserve Currency

In welcome news for the digital currency netizens, Singapore Monetary Authority’s Ravi Menon, all but-endorsed digital currencies by saying that bitcoins and other cryptocurrencies have a ‘role to play’ in the future. However, he remained consistent with the need to regulate ‘virtual currency intermediaries.’

Singapore has, for long-time, had the government’s backing in moving towards digital currency. Government-backed financial investments through Temasek Holding in digital currency, earlier in June, reiterate the pro-Bitcoin attitude in the country.

Central banks may be challenged in 2 to 3 decades

Ravi Menon, in conversation with CentralBanking.com publishers stated that, in his opinion, the role of central banks may continue despite the probable growth of virtual currency in the next few decades thus:

“It is hard to divine how technology and practices will evolve, 20 or 30 years from now. I would say virtual currencies have a role to play, but I doubt they will replace the fiat money that central banks issue – but I could be wrong.”

Reiterates Central bank role

Ravi Menon remained appreciative of the benefits of digital currency – fast and real-time based transfer and cost-effectiveness. However, he reiterated his concerns on the lack of central banking to back the entire virtual currency system.

Raises Security concerns

More importantly, the issue of money laundering, besides, terrorism-financing loomed large for any country’s interests, he expressed. “We do see a clear and present danger in the form of money laundering and terrorism financing risk, because of the anonymity in virtual currency transactions,” he opined.

He concluded that, “MAS clearly sees the potential that cryptocurrencies hold for local economic growth. As the nature of finance changes with technological advances, the old models will become obsolete. As they did with the hedge fund, banking, and insurance markets, the government of Singapore has an excellent track record of foreseeing the next wave of opportunity for economic growth of her economy.”

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com