Singapore Could Lower Cost of Cross-border Remittances With Cryptocurrency
Singapore has topped the Index of Economic Freedom for the second year in a row. This high score in economic freedom was a result of its property rights and the trade freedom in the country.
The Index of Economic Freedom was created to determine the degree of economic freedom of countries. The index was created by the Heritage Foundation and the Wall Street Journal in 1995 with the belief that economic freedom is a fundamental right. An economically free society allows individuals freedom in economic activities without coercion by government.
Economic Freedom and Fintech
Sopnendy Mohanty was interviewed by Raoul Pal, a crypto analyst in order to discuss Singapore in relation to Central Bank Digital Currency, regulations, innovations etc. Sopnendy Mohanty is the Chief Fintech Officer at the Monetary Authority of Singapore.
Sopnendy Mohanty claims that Asian markets are in a position to grow rapidly due to contributions of fintech. He subscribes to the approach of making policy via experimentation. He believes that as policymakers, they can create a conducive environment where innovations can thrive, as it is a bad idea to frontrun innovation. The innovative disruptors can work with the government to create products and achieve results that benefit everyone.
He also confirmed that plans are being made to connect to India’s Unified Payment Interface (UPI). This could be achieved by early 2022. He also acknowledged that the cost of remittance should be lowered between Singapore and Thailand. Digital currency is how the remittance cost can be reduced according to Mohanty. Lowering the cost of cross-border remittances will have a positive effect on the economy.
CBDCs and Crypto Exchange Regulation
Project Dunbar was instituted between the central banks of Singapore, Malaysia, South Africa and Australia. This was to test Central Bank Digital Currency and its usefulness in cross-border remittances. The project aims to create a shared platform that can allow exchange of digital currencies issued by different Central Banks.
The project also seeks to create a platform where institutions can transact directly with lower cost and higher speed. The result obtained from this project will serve as a prototype for the development of global and regional platforms. This could result in a future with higher speed and lower cost of cross-border remittances.
Mohanty claimed that the crypto exchanges operating in Singapore will be regulated by the government. Though he is personally more interested in lowering the cost of cross-border remittances via cryptocurrency and protecting cryptocurrency investors.
He believes that it is the private sector that can lead innovation while they focus on interoperability, safety and soundness of the system. So while the private sector can focus on innovation and providing solutions to problems, the government can look towards ensuring safety via regulations.
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