Private cryptocurrencies with no intrinsic value are likely to disappear in the long term, predicted Singapore’s central bank governor Ravi Menon at a discussion today organized by the Hong Kong Monetary Authority and the Bank for International Settlements.

Menon sees future monetary systems consisting of three key components: central bank digital currencies (CBDCs), tokenized commercial bank liabilities and tightly controlled stablecoins.

According to Menon, future stablecoins fully backed by high-quality government bonds or cash can provide innovative applications while maintaining stability, unlike volatile private cryptocurrencies.

Meanwhile, Reserve Bank of India Deputy Governor M. Rajeshwar Rao shared a positive outlook on how CBDCs will address unrealized user needs by leveraging existing technology infrastructure while ensuring privacy and security.

RBI is looking to expand the functionality of the CBDC pilot for offline payments. In the long term, Rao suggested that a shift from bilateral to multilateral CBDC mechanisms between central banks should be considered.

During the discussion, it was noted that central banks prefer to use regulated digital currencies rather than private cryptocurrencies in future monetary systems.