GCR Trend Update 2020: Crypto Trends in Singapore
Given the ongoing Coronavirus taking place in China and in the surrounding region, having a large impact on the crypto activities such as conferences and communities, we continue to believe Southeast Asia (SEA) may be potentially spared as one of the breakout regions in the eastern hemisphere in 2020. As we emphasized earlier this year, we advise our readers to pay attention more to SEA this year. SEA will see a concentrated and robust number of crypto activities in many of its regional countries, whether that’s focused on crypto, blockchain or digital currencies.
For our next few premium posts, we’ll be diving into the recent trends and ongoing opportunities in blockchain and digital currencies in SEA. Checkout all the existing ones here.
Crypto Trends in Singapore
Singapore was one of the first countries to start regulating the usage of digital currencies in 2014 by imposing taxation on earnings. Since the Chinese ban, Singapore has become the unofficial home for ICOs.
At this point, Singapore is leading the charge in Asia for its large-scale support of crypto-related technologies and fintech innovation. The Payments Services Bill released by MAS in late 2018 has laid the foundations for incorporating blockchain into the securities framework and payment systems. This has further fast-tracked blockchain based partnerships and investments that further the cause of the cryptocurrency asset class. The MAS released a retail investor’s guide to digital assets in May 2019, giving a sign that the government in Singapore is preparing for cryptocurrency’s entry into mainstream payment solutions. Ultimately, it is worthwhile noting that while Singapore used to be a promising jurisdiction in the region, it has shown itself to be hesitant in practice.
Singapore was dubbed as the country that was extremely hot in the ICO boom of 2017 to 2018. According to research, a staggering number of over 634 companies were incorporated in Singapore with a combined market cap of approximately $8.3B.
Crypto and Blockchain Trends by Category in the Country:
- Crypto banking service– Swiss-based cryptocurrency bank Sygnum has received the go-ahead to offer banking services in Singapore.
- Trade financing on blockchain- A Singaporean banking branch of CIMB Group, one of the largest Asian investment banks, has completed its first blockchain-based trade financing transaction.
- Interbank network on blockchain– OCBC has become the first Singapore-based bank to join JPMorgan Chase’s interbank blockchain network.
- Letter of credit on blockchain- Standard Chartered makes Letter of Credit transaction, pilot consisted of digitizing and simplifying the end-to-end exchange of information between all parties in a shipment of an oil product from Thailand to Singapore.
- Remittances and international transactions on blockchain-The Monetary Authority of Singapore has completed development of a blockchain-based cross border payments system that can support a range of currencies.
- Insurance on blockchain- MetLife subsidiary LumenLab is using blockchain technology to automate life insurance claims.
- Taxes on cryptocurrencies- Singapore’s plans to exempt cryptocurrencies that are intended to function as a medium of exchange from Goods and Services Tax (GST) — the local equivalent of Value-Added Tax (VAT).
- Regulation- Singapore’s Securities and Futures Act (SFA) have introduced some guidelines and soon the Payments Services Act will also cover some other categories of digital currency. With both the SFA and PSA active, we can expect that digital asset companies will have a clearer set of regulations to comply with, in line with securities and payment regulations. However, overall the regulators have shown positive attitude towards pushing the industry forward.
- STO trading platforms- A new trading platform called 1X for security tokens has launched with backing from Singapore Exchange (SGX) and technical support from ethereum startup ConsenSys. MAS granted a recognized market operator (RMO) license to 1exchange last November. Additionally, back in January, Zilliqa and Taiwan’s asset platform MaiCoin jointly issued the Hg exchange, the first of its kind in SEA to support security token issuance and trading.
- Accelerator- IBM and Citibank join Singapore Late-Stage Blockchain Accelerator
- Libra: Singapore’s central bank has held discussions with Facebook about its upcoming libra cryptocurrency
- Tokenization– Carbon exchange AirCarbon launched a global tokenized carbon credits trading platform in Singapore.
- Shipping on blockchain- The Singapore Shipping Association (SSA), the International Chamber of Commerce (ICC) and blockchain firm Perlin are jointly working on an e-registry for the ship registration and renewal process.
- Tracking on blockchain– In May 2019, the Singapore and Malaysia division of Domino’s Pizza teamed up with Dutch blockchain firm SingularityNET to deploy its blockchain-enabled artificial intelligence technology.
- Crypto Trading and Exchanges
- Exchanges- many Chinese exchanges continue to domicile and establish their base in Singapore. Currently, the United Kingdom, the United States, Hong Kong and Singapore have the largest number of registered digital currency exchanges
- Complex products- Major Asia’s blockchain-focused venture capital firm CMCC Global has launched a new institutional tracker fund for Bitcoin. Additionally, Banking giant HSBC is looking toexplore the use of blockchain for the issuance of fixed income securities in a joint trial with Singapore Exchange.
- Fiat on-boarding– Binance extends further expansion of its fiat-enabled trading platform in Singapore, but with limited functionalities and only one trading pair.
- Data on blockchain- Singapore-based online car marketplace sgCarMart and decentralized data exchange protocol Ocean Protocol are launching a blockchain-powered “Know-Your-Vehicle” data marketplace.
Opportunities in the Country
As one of the most transparent and advanced countries on cryptocurrency regulations in the Southeast Asia region, Singapore attracts many companies who wish to attract themselves a global audience. They register their companies there and also send talent into the country. As blockchain hits one of the top ten most important employee skills in the Asia Pacific region, one of the missing pieces in Singapore continues to be talent.
Nevertheless, given its robust financial infrastructure, we see opportunities in trading and exchanges to continue to thrive in the country. Additionally, the existing financial services industry will also continue to encompass and embrace cryptocurrencies and blockchain in its technology innovations.