When it involves crypto adoption, the Asia-Pacific area is method forward of the sport. Countries corresponding to South Korea, Hong Kong, China and Japan had been all early adopters of blockchain expertise, however now, Singapore is shortly rising as a world chief within the mainstream adoption of digital foreign money.
The Monetary Authority of Singapore (MAS) is the nation’s foremost monetary regulatory physique. Even earlier than regulating cryptocurrency straight, MAS fastidiously monitored blockchain companies and crypto exercise. In some situations, it actively inspired the general public to train warning and perceive the related dangers earlier than investing in cryptocurrencies.
Lee Boon Ngiap, the assistant managing director of MAS’ Capital Markets, defined, “The public should be aware that there is no regulatory safeguard if they choose to trade on unregulated digital token exchanges or invest in digital tokens that fall outside of the remit of MAS rules.”
For instance, in 2018, MAS returned funds to the Singapore-based traders of an unnamed preliminary coin choices (ICOs), saying it broke the foundations by failing to seek the advice of MAS earlier than buying and selling what it defines as digital property. It additionally issued a warning to eight crypto exchanges, stipulating that they inform the regulator earlier than buying and selling cryptocurrencies which can be thought of securities. This has meant that buying and selling can not start till they’ve been appointed as an authorised alternate or market operator.
Lee defined: “If any digital token exchange, issuer or intermediary breaches our securities laws, MAS will take firm action.”
Despite these actions, it didn’t essentially present MAS’ disapproval or unwillingness to combine crypto into Singapore’s present monetary panorama, however truly offered a glimmer of hope for crypto customers and corporations, demonstrating that the Singaporean authorities have each events’ finest pursuits in defending their funds and creating rigorously-applied regulation, whereas additionally encouraging innovation and attracting blockchain companies to Singapore.
In 2017, MAS addressed regulation in two phases. Firstly, an announcement launched in August (in response to a spate of ICO launches) indicated that if the ICO was deemed to be issuing securities, they might be topic to regulation. Three months later, it clarified this by publishing A Guide to Digital Token Offerings, offering additional rationalization and course across the regulation of cryptocurrency in Singapore. This up to date the 2002 Risk-Based Capital framework, which had develop into unfit for function due to the rising applied sciences and new enterprise fashions that cryptocurrency has introduced with it.
The 2017 information outlined a number of adjustments, together with classifying blockchain and crypto firms into three tiers relying on their particular operations; lowering capital necessities (the extent of liquidity required to commerce in Singapore); easier general regulatory necessities; and danger administration for expertise and outsourcing.
Nevertheless, the consequence has been a lot wanted readability and certainty round Singapore’s crypto house, resulting in the creation of the extra versatile Payment Services Act 2019 (PS Act) by MAS in January 2020. The regulation and corresponding licence offers a progressive framework that regulates funds techniques and digital fee token providers in Singapore, permitting sure cryptocurrency companies to proceed working within the nation.
Although no licences have formally been given out but, some companies, together with main funds platform Wirex, crypto buying and selling platform Binance and digital foreign money alternate Coinbase, have been granted a temporary exemption from holding the licence, permitting them to proceed offering their providers till they safe the suitable licence. For firms like Wirex that prioritize regulatory compliance within the territories they function in whereas in search of to safeguard consumer’s funds, this offers shoppers the boldness to work within the crypto house that’s so typically deemed unsafe.
This regulatory acceptance, coupled with Singapore’s present repute as a finance hub, is prone to make the nation a haven for crypto exchanges and startups over the subsequent few years.
Startups & exchanges
In 2018, Singapore was the second most popular country on the planet for ICOs, and as of November 2020, 234 blockchain companies had been working in Singapore. A leading recruitment firm said that they estimated that there was a 50% enhance in crypto-related jobs in Asia from 2017 to 2018, with a spotlight being on Singapore particularly.
Singapore’s enormous monetary sector and connections with worldwide monetary markets, and the crypto-friendly angle and frameworks put in place by MAS, imply that it has created an atmosphere the place entrepreneurs and traders are welcomed to freely experiment and collaborate. When in comparison with different nations corresponding to South Korea which can be inhibiting the expansion of crypto as a consequence of considerations with fraud, danger and hypothesis, Singapore’s local weather fosters the event of blockchain expertise, services, whereas additionally offering for regulation and a strong programme that addresses areas corresponding to anti-money laundering, fraud, and cyber-security.
MAS help doesn’t cease there, as in August, it introduced that it could offer 250 million SGD over the subsequent three years as a part of Singapore’s Financial Sector Development Fund, to help the nation’s monetary trade. This would purpose to accelerate tech and innovation-led growth within Singapore’s financial sector, in addition to present further funding for companies experimenting, creating and delivering applicable fintech options corresponding to AI-focussed initiatives. The announcement comes after MAS revealed that the earlier 5 years of fintech initiatives have yielded very optimistic outcomes for Singapore.
Singapore’s proximity to China, the place crypto-trading has been outlawed, has additionally made it a pretty proposition for companies which have discovered themselves having to relocate. For instance, the CEO of imToken introduced that they relocated to the nation, largely as a consequence of the truth that it was pleasant to blockchain expertise.
Singapore state investor, Temasek, has recently joined the Libra Association as the primary Asian investor, in addition to creating a number of subsidiary firms specializing in blockchain functions corresponding to digital id and commerce finance. The Libra Association has gained important publicity within the earlier months as the corporate main Facebook’s proposed digital foreign money, nonetheless, this isn’t with out controversy. Political pushback has meant that it has turned to firms corresponding to Temasek in crypto-friendly areas to win over international regulators, and assist to push the mission ahead.
Wirex, a UK FCA-registered digital fee platform, is one other firm that opened the doorways of its Singapore workplace solely final 12 months. With the core mission of bridging the hole between conventional and digital foreign money, Wirex already has greater than 3.1 million prospects in 130 nations, and this transfer marked the beginning of its speedy enlargement additional into the APAC area. The transfer was well-received, with Wirex experiencing enormous ranges of development within the area – again in May, the company announced that it had achieved over 200% development in its month-to-month alternate quantity within the APAC area.
Singapore performs host to many high-profile fintech, blockchain and cryptocurrency conferences all year long. Each November/December, the Singapore Fintech Festival takes place with 1000’s of individuals converging on the Singapore Expo Convention and Exhibition Centre to debate all issues FinTech. This annual occasion comes from MAS, The Associations of Banks in Singapore and SingEX Holdings. Although the pageant is trying to be totally digital this 12 months, the agenda includes Distributed Ledger & Digital Currency and RegTech, in addition to classes on the pandemic restoration and monetary inclusion.
The pageant additionally contains a lot of smaller occasions, together with The Fintech Conference & Exhibition, The Global Fintech Hackcelerator, Deal Fridays and The Fintech Awards. Each occasion will function keynote audio system corresponding to leaders of worldwide monetary establishments, central banks, regulatory companies and enterprise capital corporations.
Back in July, Singapore Blockchain Week additionally came about, hosted by the Blockchain Association Singapore and NexChange Group. The digital occasion was one of many largest government-supported digital blockchain occasions to be organised in Asia, as soon as once more reiterating Singapore’s outstanding place within the Asian blockchain house. As Juwan Lee, CEO of NexChange Group said, “The growing presence of Singapore as the blockchain hub for Asia makes this event a pivotal part of the next phase of growth.”
The occasion introduced collectively over 5,000 regulators, trade leaders, teachers, and innovators from throughout the globe, to showcase real-world use instances of blockchain expertise, how that is set to play a extra essential position post-Covid, and effectively as discussions across the PS Act licence selling Singapore’s standing as a world blockchain hub.
Why is MAS bullish for blockchain?
Much of the expansion within the adoption of cryptocurrency throughout the globe might be attributed to folks recognising the advantages of digital foreign money, together with diminished prices, improved effectivity, and elevated security and safety. For Singapore, which has a high-level of cross-border transactions, this offers an actual use-case and profit for its financial system.
Nevertheless, regardless of Singapore’s local weather showing to welcome blockchain in its entirety, Ravi Menon, the managing director of MAS identified that they “don’t regulate the technology, [they] regulate the use cases.” It’s due to this fact essential to notice that MAS is specializing in creating blockchain expertise, not only for the event of cryptocurrencies and as a kind of fee, however as a method of bettering authorities processes, corresponding to authenticating identities to subject passports, managing authorities data and providers, exchanging contracts and executing transactions to gather taxes.
Most excitingly, MAS has been engaged on Project Ubin, an initiative exploring blockchain expertise for clearing and settlement of funds and securities, in addition to Singapore’s central financial institution digital foreign money. Singapore could very effectively be one of many first nations to launch a central financial institution digital foreign money and combine blockchain expertise into its fee system.
The benefits of blockchain and the potential to enhance present techniques implies that the Singapore authorities stays very bullish on cryptocurrency buying and selling and blockchain expertise. As a ‘Currency Cold War’ begins to emerge, the query stays as as to whether Singapore can keep on prime of rising competitors from areas corresponding to Bangkok, Beijing and Jakarta, all of whom are providing additional incentives to encourage crypto growth of their hubs.
Lottie Wells, the communications supervisor at Wirex, a digital funds platform, is a robust believer in the advantages of the digital financial system, and is an advocate for each the sector, and girls’s involvement inside it.