MAS Head says Central Banks and Regulators “Should Welcome” Decentralized Financ

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The head of the Monetary Authority of Singapore (MAS) is bullish on decentralized finance (DeFi), and that central banks and regulators can potentially shape this decentralization. Earlier this week, Ravi Menon, Managing Director at Singapore's central bank, gave remarks at the “Decentralised Finance and the Future of Money” panel at the Andrew Crockett Memorial Lecture by Mark Carney via Video Conference. Here, he talked about centrifugal forces driving financial functions away from the traditional core and affecting all aspects of the monetary system. “The delivery of retail financial services is being decentralized,” said Menon, explaining that it is happening in two ways. One is by non-financial players, including big tech, fintech, and smaller technology firms which are often unregulated and providing payments, lending, savings, and investments as complements to their core digital service. The second is regulated financial players who are reinventing their business models and leveraging on technology to offer an array of non-bank digital platforms in an attempt to reach new customers at lower acquisition costs. “Central banks and regulators should welcome both these developments,” said Menon, adding, regulators also need to be on alert about new sources of risk. What needs to be done is “adapt our regulatory approaches,” including paying greater attention to market conduct, consumer protection, and technology risks and making regulatory frameworks more modular and agile.Source