When it comes to cryptocurrency adoption, the Asia-Pacific region is way ahead of the curve. The likes of South Korea, Hong Kong, China and Japan were early adopters of crypto and blockchain technology; now, Singapore is quickly emerging as a world leader in the mainstream adoption of digital currency.
The Monetary Authority of Singapore (MAS) is the country’s main financial regulatory body. In the past, MAS took a somewhat hands-off approach to crypto and its underlying blockchain technology. On several occasions, it even urged the public to exercise caution and understand the associated risks before investing in cryptocurrencies.
“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” a spokesperson explained at the time.
Recently, MAS returned funds to the Singapore-based investors of an unnamed ICO, saying it broke the rules by failing to consult MAS before trading what it defines as digital assets. It also extended a warning to eight crypto exchanges, stipulating that they inform the regulator before trading cryptocurrencies that are considered securities. This has meant that trading cannot commence until they have been appointed as an approved exchange or market operator.
In their own words: “If any digital token exchange, issuer or intermediary breaches our securities laws, MAS will take firm action”.
But this shouldn’t be interpreted as disapproval, or an unwillingness to integrate cryptocurrency into Singapore’s existing financial landscape. Rather, it’s a positive sign that the Singaporean authorities recognise the need for rigorously-applied regulation if the process is to be smooth and the effects long-term.
In 2017, MAS addressed regulation in two stages. Firstly, a statement released in August (in response to a spate of ICO launches) indicated that if the ICO was deemed to be issuing securities, they would be subject to regulation. Three months later, it clarified this by publishing “A Guide to Digital Token Offerings”, providing further explanation and direction around the regulation of cryptocurrency in Singapore. This updated the 2002 framework, which had become unfit for purpose thanks to the emerging technologies and new business models that cryptocurrency has brought with it.
The 2017 guide set out a number of changes, including the classification of blockchain and crypto companies into three tiers, depending on their specific operations; reduced capital requirements (the level of liquidity required to trade in Singapore); simpler overall regulatory requirements; and risk management for technology and outsourcing.
The result has been much needed clarity around cryptocurrency regulation. This, coupled with Singapore’s existing reputation as a finance hub, is likely to make the country a haven for crypto exchanges and startups over the next few years.
Startups & Exchanges
Singapore’s proximity to China, where crypto-trading has been outlawed, has also made it an attractive proposition for businesses that have found themselves having to relocate.
The CEO of imToken recently described Singapore as “friendly to blockchain technology”, after announcing plans to relocate to the country.
Upbit, South Korea’s largest exchange, will also establish itself in Singapore this year. Upbit is owned by Korean tech-giant Kakao Corp, and originally launched in the Korean market in mid-2017. The decision to expand into Singapore was heavily influenced by the country’s progressive cryptocurrency regulation, and its desire to establish a strong crypto and blockchain sector.
Wirex, a UK FCA-registered digital money payment platform, is another company that has recently opened the doors of its Singapore office. Wirex already has more than 1.8 million customers in 130 countries, and this move marks the start of its expansion into the APAC region.
“As one of the few platforms that supports XRP and Litecoin, the launch of Wirex APAC is great news for those in the region. We look forward to giving users in Asia the chance to experience a genuinely innovative service that unites the best of digital and traditional currency,” explains Seimin Kuan, Managing Director of Wirex APAC.
Singapore plays host to many high-profile fintech, blockchain and cryptocurrency conferences throughout the year. This month, the Singapore Fintech Festival runs until Friday 16th November, with thousands of participants converging on the Singapore Expo Convention and Exhibition Centre to discuss all things FinTech. This annual event is the brainchild of MAS, The Associations of Banks in Singapore and SingEX Holdings. The agenda for 2018 includes AI in Finance and The Future of Money and Banking, as well as sessions on InsurTech and financial inclusion.
The festival also comprises a number of smaller events, including The Fintech Conference & Exhibition, The Global Fintech Hackcelerator Demo Day, The AI Finance Summit and The Fintech Awards. Each event will feature keynote speakers from leaders of international financial institutions, central banks, regulatory agencies and venture capital firms.
It should come as no surprise that Wirex is in attendance at the festival. The team is looking forward to mingling with blockchain’s best and brightest, sharing ideas and discussing the future of the industry – you can find them at booth 1L26 for the duration of the festival. Swing by the booth and say hello, or open your free Wirex account and see what all the fuss is about!