The Monetary Authority (MAS) has selected central bank digital currencies (CBDCs), tokenized bank deposits and potentially well-regulated stabelcoins as eligible digital assets for purchase, exchange and storage transactions in Singapore.
The choice is based on the fact that, unlike most cryptocurrencies, these categories of digital assets can potentially be treated as a payment instrument tied to the real value of fiat currency, commodity or financial collateral, or issued by state banks altogether.
The likely scenario of using digital assets within the city-state will be worked out by MAS in collaboration with the Committee on Payments and Market Infrastructure (CPMI) as well as the Bank for International Settlements (BIS) of Singapore.
The regulator will involve 11 institutions specializing in asset management, fixed income and foreign exchange, including banking corporations HSBC, Standard Chartered, DBS and CITI, in Project Guardian.
The Central Bank of Singapore supported the MAS initiative and agreed with the need to improve existing traditional financial systems through the development of cryptoecosystem tools.
Earlier, MAS Singapore Chairman Tharman Shanmugaratnam questioned the
the need to regulate the city-state’s crypto industry along the lines of the traditional financial market.