A common use case for crypto tokens is payment. But does that make them Money? Money – as we learnt in Economics 101 – serves three functions: as a medium of exchange, a store of value, and a unit of account. No crypto token currently meets these three functions in sufficient measure to qualify as Money. My colleagues on the Financial Stability Board – Agustin Carstens and Mark Carney – have spoken at length on this subject recently, with erudition and eloquence. Let me briefly echo some of the key points. With the possible exception of the dark web, crypto tokens are not widely accepted as a medium of exchange in any market, let alone across any variety of transactions Payment transactions in crypto tokens are often slower and more expensive than conventional electronic transfers of funds. Crypto tokens cannot be a store of value if their prices fluctuate so much. Since the beginning of last year, the daily value of Bitcoin against the US Dollar has fluctuated about 20 times more than the Singapore Dollar did against the US Dollar. People may buy some crypto tokens to speculate on their values. But with such volatility, I doubt they will put their retirement savings into them. Crypto tokens also fail as a unit of account. How many entities do we know of, which maintain 1/6  BIS central bankers' speeches  their financial statements in crypto tokens? So, does it mean that crypto tokens can never become Money? With technology, we can never say never.
Given the gaps in traditional information sources, MAS is exploring some unconventional ways in which to gather data about the scale and scope of crypto token related activities. One, the crypto token blockchains themselves can provide a wealth of information – including time stamps, recipient and sender addresses. Two, the Application Programming Interfaces or APIs provided by crypto-exchanges present real-time insights on current flows in the crypto market, including information on the fiat currencies that are being exchanged for crypto tokens. Money laundering A clear and present danger posed by some crypto token activity is money laundering and terrorism financing. Intermediaries dealing in crypto tokens are already required to report any suspicious transactions to the Commercial Affairs Department. In addition, the proposed Payment Services Bill will require intermediaries that buy, sell or exchange virtual currencies to specifically address money laundering and terrorism financing risks. Intermediaries will be required to carry out customer due diligence and put in place controls and processes that are commensurate with their risks. Investor protection Investor protection is another immediate concern arising from the crypto mania. Where the crypto tokens represent ownership or a security interest over an issuer’s assets or any property, or a debt owed by the issuer, they may be regarded as securities under the Securities and Futures Act.