The head of Singapore's central bank said there are great uses of cryptocurrencies - especially stablecoins.
Bankers and government officials around the world are proving to be friendlier to cryptocurrencies than ever before. Tharman Shanmugaratnam - president of the central bank of Singapore - recently stated that cryptocurrencies have a place in the country's financial sector. All this market needs is regulation of illegal financing.
A place for stablecoins
On Wednesday, the CEO showed his support for cryptocurrencies at the Asia Financial Markets Forum. The financial applications of this technology could extend beyond "pure speculation" and "illegal financing", he said.
The official's interest seems most concentrated on the stablecoins, which he believes have a role to play in traditional financial systems. It admits, however, that such assets must be regulated in order to combat their use for "illegal financing".
This seems to be a common prospect among regulators. Jerome Powell - chairman of the US Federal Reserve - said he "has no intention" to ban cryptocurrencies, but shows increased concern over how stablecoins are used. Likewise, SEC president Gary Gensler has described stablecoins as "poker chips" at the casino tables.
For Shanmugaratnama, however, stablecoins offer tremendous economic benefits, despite the risks involved.
"I think the future will be one in which regulated stablecoins play a useful role in a traditional payment system that innovates and becomes more interoperable across borders in terms of cheap, fast and instant payments," he said.
The central bank said it remains open to cryptocurrencies in the name of technological innovation. Singapore is recently building its status as a global cryptocurrency technology hub. A survey this summer found that half of Singaporeans own cryptocurrencies.
The president of the central bank also refrains from using terms like "crypto" or "cryptocurrency" and instead treats digital assets as "fintech". According to him, financial technologies are extending financial services to people without internet banking, while forcing traditional financial systems to improve their technologies.
So far, however, El Salvador remains the only country where bitcoin is legal tender.
