Of course, the ancient Romans did not have a god for the Internet, but perhaps Mercury – the god of commerce and communications – comes closest. The future of Juno, Plutus, and Mercury is increasingly becoming entwined, in large part due to technology. Let’s check out what Juno, Plutus, and Mercury have been up to lately. JUNO AND INNOVATIONS IN MONEY Juno has been busy in the past decade with new forms of money emerging. But before we can make sense of new money, let us refresh our understanding of existing money. Today, we keep money in two forms: physical cash in the form of notes and coins; and digital money in the form of deposits with commercial banks. Most of our money is privately created by commercial banks and is in digital form. Bank deposits account for 92% of the money supply in Singapore and are the basis for all electronic payments by households and firms, using debit and credit cards, e-wallets, and account-toaccount bank transfers. The commercial banks in turn place reserves with the central bank to settle inter-bank transactions arising from these electronic payments. Confidence in money is anchored by the central bank. Central banks conduct monetary policy to ensure low and stable inflation, which safeguards the purchasing power of our money. In addition, by regulating commercial banks and acting as lenders of last resort during crisis periods, central banks underpin the overall soundness of the banking system.
Investors in these tokens are at risk of suffering significant losses. But MAS is also of the view thatblockchains and crypto tokens can bring many potential benefits. The blockchain is suited for applications where it is important to know the history of ownership and transfer of value but there is no trusted central party or reliance on a central party is too costly. A potentially strong use case of crypto tokens is to facilitate cheaper and faster cross-border payments and trade finance. But to be regarded as money, crypto tokens need to be more stable in value and have credible backing. Hence, the emergence of stablecoins. Stablecoins Stablecoins seek to combine the credibility of fiat currencies with the advantages of the blockchain. The more prevalent stablecoins are pegged to the US Dollar, promise to redeem at par, and claim to be backed by reserves. Will Juno accept stablecoins as money? An encouraging sign is that stablecoins are beginning to find acceptance outside of the crypto ecosystem. Some technology firms have integrated popular stablecoins into their payment services. Visa and Mastercard both allow transactions to be settled using USD Coin. Or are stablecoins more akin to the Chimaera, a monstrous fire-breathing hybrid creature in Greek mythology? Stablecoin issuers look like banks when they take money and offer to return it on demand, but if they do not intermediate credit, would bank regulation be appropriate for them?