According to a senior executive at Singapore’s central bank and financial regulator, speculative cryptocurrency trading may be having a negative effect on experimentation and advancement in the burgeoning blockchain technology and cryptocurrency space.
In an interview with CNBC, Sopnendu Mohanty – chief fintech officer at the Monetary Authority of Singapore (MAS) – said he feared that on-going speculative investment in digital currencies might “destroy the experimental value of cryptocurrency”.
“…the speculators and the people who are making money out of this speculation of the cryptocurrency (market) are perhaps negatively impacting the whole experimentation of cryptocurrency”, the fintech chief said.
The MAS has expressed repeated interest in distributed ledger technology (DLT) and is currently working on an experimental blockchain project of its own. Initiated in 2016 and dubbed Project Ubin, the venture is divided into five phases and focused on the creation of a blockchain-based network to support interbank transactions. It also involves the creation of a digital version of the Singapore dollar.
Multiple prominent banks, such as the Bank of America Merrill Lynch, Credit Suisse, Citi Bank, JP Morgan, and DBS Bank Ltd (to name a few) are involved in Project Ubin, and as per a report by management consultancy firm Accenture, the second phase of the project was successfully completed late last year. A final trial, with the crypto version of the SGD (which will be used to conduct trades and purchase assets), is due to be completed this year.
Speaking about the speculation in the market and the detrimental impact it might have on blockchain tech innovations, Mohanty said it was worrying “because we are going to continue to experiment on this fabulous technology and find the use case, hopefully, in the long run”.
Speculative trading in the crypto market has set alarm bells ringing for regulatory authorities worldwide. Earlier this year, South Korea moved to bring the speculation in the market under control by banning anonymous crypto trading accounts.