Singapore Is Setting Its Sights on Becoming a Global Crypto Hub
Updated: Aug 31, 2023
Taking a bold step forward, Singapore is eyeing a place as an international hub in the fast-growing crypto industry.
While other financial centres are still quite cautious in dealing with cryptocurrency, Singapore is preparing itself to welcome it with open arms according to a Bloomberg report.
Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS) said, “We think the best approach is not to clamp down or ban these things.” As the regulator of banks and financial firms, MAS recognises the multitude of risks when it comes to cryptocurrency. Hence, it will be putting in place strong regulations to ensure that only firms who’ll meet its requirements will be allowed to operate.
Countries around the world have different ways of handling crypto. Japan just recently allowed crypto investment funds while El Salvador is the first country to accept Bitcoin as a legal tender. While there’s been huge growth in cryptocurrencies and investors through the years, regulators remain very cautious.
“With crypto-based activities, it is basically an investment in a prospective future, the shape of which is not clear at this point,” admitted Menon. Still, he believes that not being open about the opportunities that can be gained from crypto risks Singapore being left behind. He added, “Getting early into that game means we can have a head start and better understand its potential benefits as well as its risks.”
While there’s much to be gained, there’s no doubt that the stakes are high, which is why Menon stresses that Singapore should raise its safeguards to counter risks like illicit flows.
Part of Singapore’s plans to bring this dream into fruition is to develop crypto technology, understanding blockchain, smart contracts and prepare for a Web 3.0 world, said Menon.
Of course, the island nation is not the only place that plans to benefit from the growth of cryptocurrencies. Various locations such as Miami, El Salvador, Malta, and Zug in Switzerland are also exerting efforts to become the next big global crypto hub.
Known for being extremely volatile, the crypto industry grew in strength and numbers with very few regulations. Hence, many industry players are quite bullish about how governments will regulate it.
Aside from being a flourishing financial hub, Singapore’s approach in handling crypto has made it attractive to crypto firms such as Binance Holdings Ltd and Gemini in setting up offices in the country.
More are expected to follow suit as 170 crypto firms have already applied for a MAS license, increasing the total number of crypto firms who are seeking to operate in Singapore to around 400. This is after the Payment Services Act was put into effect in January 2020.
While there has been great interest, in reality, there have only been three crypto firms that have received the highly-desired license, which include DBS Group Holdings Ltd., Singapore’s largest bank. So far, two companies have been rejected, while 30 companies withdrew their applications.
MAS may be keen on making Singapore a crypto hub but such steps ensure that they are safely treading on this growing industry. It is carefully reviewing and assessing all applicants to make sure that each company meets its strict requirements.
“We don’t need 160 of them to set up shop here. Half of them can do so, but with very high standards, that I think is a better outcome,” said Menon.
Written by Abby Rebong