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- Ravi Menon predicts private cryptocurrencies will fade and envisions a future with CBDCs and stablecoins.
- India’s central bank deputy governor sees success for CBDCs, emphasizing accessibility, cybersecurity, and interbank use.
- TrueUSD stablecoin depegged due to sell orders after Binance CEO’s resignation and Reuters report on terror financing.
In a recent panel discussion on the future of the monetary system, Singapore’s central bank’s managing director, Ravi Menon, predicted that private digital coins, such as native digital tokens, will eventually fade from the monetary scene due to their inability to meet fundamental financial service tests. Menon’s comments come as TrueUSD (TUSD), a stablecoin, depegged and dropped to a low of $0.995 amid various factors.
Private Digital Coins Failing the Test of Money
During the panel discussion, jointly hosted by the Hong Kong Monetary Authority and the Bank for International Settlements, Menon highlighted that private digital coins have failed to retain value. He explained that individuals typically do not entrust their life savings to these assets because they view them as tools for quick profit rather than reliable stores of value. Menon emphasized that private cryptocurrencies will eventually exit the scene due to their inability to meet essential monetary criteria.
TrueUSD (TUSD) Stablecoin Stumbles Amidst Market Turmoil
The TrueUSD (TUSD) stablecoin’s grip on its US dollar peg began to loosen at the start of the week as traders hastily offloaded their holdings amidst mounting concerns triggered by the departure of Changpeng “CZ” Zhao as CEO of Binance, the world’s largest cryptocurrency exchange. The depeg intensified on November 27 and 28, sending the TUSD price spiraling down to a low of $0.995.
Riyad Carey, a researcher at Kaiko, noted the TUSD stablecoin peg’s shaky footing, attributed to a series of substantial market sell orders. The largest TUSD selloff amounted to a staggering $3 million in a single transaction. At the time of writing, the TUSD price has exhibited signs of recovery, trading at $0.997.
CBDCs Poised for Promising Future, Says RBI Deputy Governor
Meanwhile, during the same panel discussion, M. Rajeshwar Rao, a deputy governor at the Reserve Bank of India, expressed optimism about the success of central bank digital currencies (CBDCs). Rao highlighted the importance of meeting unmet user needs and employing accessible existing technology and infrastructure for CBDCs to gain popularity. He also emphasized the critical role of cybersecurity and resilience for CBDCs to gain trust and suggested exploring implementing them on a multilateral basis in the future.
The Reserve Bank of India is currently exploring offline transactions to enhance the practicality of CBDC usage and envisions its digital currency facilitating interbank money market transactions.