Singapore Central Bank Head: No One Can Predict the Price of Bitcoin
RegulationBit News Today2 min read
In a recent public statement, the longtime head of Singapore's central bank, the Monetary Authority, said that no one can accurately predict or control Bitcoin's price.
Addressing a virtual conference, he called the cryptocurrency "extremely volatile", and criticized what he saw as a lack of regulatory oversight and consumer protections in the space.
The central banker dismissed any claims that Bitcoin or other cryptocurrencies can serve as a reliable store of value or medium of exchange. He repeated the institution's stance that Bitcoin is not a legal tender in Singapore.
At the same time, the long-serving monetary authority head stepped away from a strict prohibition of Bitcoin. He did not call for an outright ban on cryptocurrencies, and even lauded blockchains and cryptography as innovative technologies. ## Low Impact on Financial Stability
The central banker pointed out that, in the current size of the financial market, Bitcoin's price swings do not threaten financial stability. The cryptocurrency trading volume is still tiny compared to traditional markets, and concerns about the impact of Bitcoin contagion dissipating.
These comments come at a time of an early period of a large decline in Bitcoin prices and in the wake of several large-scale regulation actions against exchanges and other entities by U.S. authorities.
Singapore is one of the few jurisdictions that has maintained a welcoming stance to cryptocurrencies. But the law does not apply the same framework to digital tokens that would apply to fiat-for-fiat currency transactions.
The regulators also did not allow the cryptocurrency payment systems to offer full banking services, but the ban is often flouted in practice. One of the more visible exchanges, Binance, let users pay for goods and services using the digital currency until restrictions were set several weeks ago. Singapore has one of the highest rates of cryptocurrency adoption in the world. ## Days of Promise?
Opinions remain divided on the future of Bitcoin. The instability in prices, both sudden and severe, may make many investors leery of adopting the cryptocurrency. On the other hand, Singapore's central banker notes, the technology has great potential.
The recent decline in prices shows that Bitcoin remains an incredibly volatile asset class. It's possible that the reasons for the drop are short-term. It's no longer clear what kind of long-term drivers for adoption exist. In the meantime, it's a prudent idea to assume that no one - even central bankers - can predict the price of Bitcoin with any certainty.
