Overview
Singapore turns into a hub for crypto companies; provides regulated licensing opportunities to attract foreign companies
In the year 2020, the Monetary Authority of Singapore (MAS) received 180 applications for crypto payment licenses from crypto companies within Singapore. This increased demand has been restricted and only two dozen licenses have been released after a thorough due diligence process was conducted.
Singapore is one of Asia’s main investment banking and asset management hubs, which has strengthened its position in the blockchain and cryptocurrency sectors. In 2020, PwC stated that SIngapore contains 6% of the world's crypto funds, ranking it behind the US and the UK.
ACCESS, the Singapore Cryptocurrency and Blockchain Industry Association, is a global hub that overlooks businesses that are run by digital currencies and blockchain technology, and offers a range of digital currencies such as Bitcoin, Ethereum, Tether, Ripple, Litecoin, Bitcoin Cash, Cardano and Binance. Businesses operating in Singapore are provided with regulatory support and are encouraged to partner with other organizations in order to diversify their businesses.
Due to the large scale and variety of Singapore’s crypto companies and service providers, many digital asset companies have sought refuge within the city in order to avoid regulatory crackdowns on the cryptocurrency sector in other countries. Well-known companies such as Huobi - a crypto exchange company that was initially located in China - and US firm Gemini have set up headquarters in Singapore.
Moreover, Singapore has assisted with the development of a licensing regime for crypto companies, which attracted the attention of a large number of businesses, leading to them collaborating with leading regulators.
MAS remains cautious with regards to cryptocurrencies; structured system allocated to regulate crypto usage
The cryptocurrency sector within Singapore has affected both the economic and social sectors; yet, the government of Singapore has remained cautious whilst dealing with cryptocurrencies. Taking a more pragmatic approach, the government does not consider cryptocurrencies to be the equivalent of money. It is, instead, considered a regulated product that is categorized under capital markets products as a digital payment token, e-money or a digital token that is unregulated and only used for utility purposes.
Singapore’s central bank, also referred to as the Monetary Authority of Singapore (MAS), does not condone retail use of cryptocurrencies; however, it does collaborate on projects dealing with cryptocurrencies. One such project is ‘Project Ubin’ - a means to expand the use of blockchain and distributed ledger solutions in order to clear and settle payments and securities. Another collaboration is with the Bank for International Settlements Innovation Hub on ‘Project Dunbar’, which enables the development and design of new multi-central bank digital currency models that could assist with cross-border payments in digital currencies.
Conducting cryptocurrency-related activities within Singapore would require legal assistance from Singaporean law firms in order to understand the proper regulation of currency use under the Singapore legal system. The use of cryptocurrencies could be regulated or unregulated, which are both accepted under the Singapore Payment Services Act 2019. However, due to the numerous segments within the industry, cryptocurrencies linked to capital markets products or securities can fall under Singapore's Securities and Futures Act.
Individuals or companies offering payment services require a payment license from the Payment Services Act (PSA), which can fall under any of the following categories: domestic money transfer service, e-money issuance service, digital payment token (DPT) services, money changing service, account issuance service, cross-border money transfer service and merchant acquisition service.
Key Trends
Cryptocurrency portfolios expand post-COVID-19; existing market volatility does not pose threat to industry growth
With cryptocurrency markets expanding post-pandemic, many investors in Singapore have sought Ethereum as a currency favorite. Within the country, 67% of investors have delved into the crypto markets and 78% are owners of Ethereum.
A survey conducted by the platform Gemini, Seedly and price-monitoring site CoinMarketCap in 2021 showed that 2,862 individuals in Singapore had invested in cryptocurrencies. Those taking part in the survey were between the ages of 18 and 65, and half of the respondents aged between 25 and 34 were owners of cryptocurrencies.
The instability within the market and uncertainty that hovered over the industry during the pandemic have left many investors afraid to partake in cryptocurrency transactions; this is based on 52% of the respondents who participated in the survey, who stated that the market's volatility posed a threat with regards to investing. The same survey also showed that 29% stated a lack of knowledge around investments caused them to refrain from purchasing cryptocurrencies.
Nevertheless, the level of interest within the market in Singapore is increasing and expanding, and the industry hopes to tackle the knowledge gap that has developed in order to educate more individuals and businesses with regards to cryptocurrency and its accessibility.
Tighter security noted within sector; consequences arise due to the collapse of Three Arrows Capital
In May 2022, Bitcoin began to lose half its value due to the collapse of stablecoin TerraUSD along with its paired token Luna. This resulted in investors such as 3AC (Three Arrows Capital) incurring a loss of USD 200 million due to investments made in Luna. These changes have had a negative impact on the sector where MAS has also taken a much stricter stance on consumer protection, money laundering and other illegal activities linked to the digital currency sector.
MAS has claimed that the strict measures being implemented by it were due to the sharp speculative price changes, which were impractical for retail investments among the public. Furthermore, MAS has restricted marketing and advertisement of all cryptocurrency services in public areas and transport venues, which has resulted in the removal of advertisements and the extraction of cryptocurrency ATMs.
Even though MAS has prevented the use of cryptocurrencies as retail investments, more focus has been given towards blockchain technology with regards to streamlining and developing cross-border transactions. Additionally, in May 2022, MAS announced its plans to assess the feasibility of using asset tokenisation and the practicality of autonomous trading with the assistance of blockchain technology.
Key Statistics
- As of 2021, investments in crypto and blockchain companies within Singapore rose to SGD 1.48 billion, which was ten times as much as in the previous year.
- As of August 2021, a study showed that among the 67% of personal investors that held cryptocurrencies in general, 78% owned Ethereum with 69% holding Bitcoin.
- A majority (81%) of respondents had invested in cryptocurrency as a long-term investment, as per a survey conducted in 2021. Half the respondents aged between 35 and 44 years with ownership of cryptocurrency saw its value increase to SGD 10,000.
Top Singapore MNCs in Cryptocurrency
RIPPLE LABS SINGAPORE PTE. LTD.
Repeated Company as per the Client -
OKCOIN PTE. LTD.
Repeated Company as per the Client -
QUOINE PTE. LTD.
Quoine, which trades as Liquid, is a cryptocurrency-fiat exchange platform. Established in 2014, the company focuses on creating a safe and progressive Bitcoin ecosystem for all market participants. Quoine is listed among the top ten cryptocurrency exchanges in the world based on daily traded spot volume, and it has extensive BTC/JPY liquidity. Quoine manages digital assets with a cold wallet and multi-party computation (MPC) technology. Some of the key features of Quoine's security procedures include two-factor authentication, a cooling-off period and withdrawal protection. In 2020, Quoine applied for a large payment institution licence under Singapore's Payment Services Act, to provide digital payment token services.
LUNO PTE. LTD.
Incorporated in 2012, Luno is a cryptocurrency firm with an extensive network of customers across the globe. A wholly owned subsidiary of Digital Currency Group, Luno has operations throughout Africa, Southeast Asia, the United States and Europe. Luno's tools and services make it safe and easy to buy, store and learn about cryptocurrencies. It collaborates with regulators all across the world, and all of the cryptocurrency Luno stores for its customers is audited by independent auditors. Lunoutilizes its network, expertise and capital to establish and assist blockchain and digital currency firms. The Luno team comprises individuals with experience in engineering, finance and industry.
BLOCKCHAIN.COM (SINGAPORE) PTE. LTD.
Founded in 2011 by well-known Silicon Valley, Wall Street and London investors, Blockchain.com began as an early pioneer of critical infrastructure for the Bitcoin community. It is the first dedicated sell-side trading desk for the cryptocurrency market, offering institutional-grade OTC trading, advising and asset management services. The business launched the Blockchain Explorer, and later developed a cryptocurrency wallet that accounted for 28% of Bitcoin transactions between 2012 and 2020. Blockchain.com also introduced the popular and commonly used crypto wallet, which allows anybody, anywhere, to manage their own money.
OKBL PTE. LTD.
OKX is a cutting-edge cryptocurrency exchange that also offers superior financial services. It relies on blockchain technology to offer its customers everything they need for smart trading and investing. OKX serves users in more than 100 countries across the globe. It offers trading in spot, margin, futures, options, and perpetual swaps, as well as DeFi, loans and mining. OKX provides cutting-edge crypto trading and earning services to customers worldwide. Customers can trade hundreds of tokens and trading pairs on the spot, margin and derivatives markets with OKX. In Singapore, OKBL was incorporated in 2014; the company changed its name to OKX in 2022.
PAYWARD BROKERS PTE. LTD.
Payward Brokers, which operates as Kraken, is a digital currency exchange and Bitcoin trading and investment platform which was incorporated in Singapore in 2019. Globally, Kraken has been at the vanguard of the blockchain revolution since 2011. The company provides traders with trading tools, a user interface, technological security and regulatory compliance for digital currencies. Kraken charges fees for trading, stablecoin fees, foreign exchange costs, dark pool fees and margin trading. Kraken's charge schedules are volume-based, so the more the trade, the cheaper the rates. Kraken provides liquidity and competitive pricing across all of its markets, allowing investors to achieve their investing objectives swiftly and confidently.
COINBASE SINGAPORE PTE. LTD.
Repeated Company as per the Client -
GEMINI TRUST COMPANY (SINGAPORE BRANCH)
Repeated Company as per the Client -
BITSTAMP ASIA PTE. LTD.
Bitstamp Asia was established in Singapore in 2020. Globally, Bitstamp is one of the most regulated crypto exchange firms. As the world's oldest cryptocurrency exchange, it has been a constant supporter of the Bitcoin economy. Bitstamp offers a secure and transparent platform to over four million clients and allows partners to gain access to growing crypto marketplaces via time-tested infrastructure. Headquartered in Luxembourg, Bitstamp has offices in Slovenia, the United Kingdom and the United States. With 50 licences and registrations in key jurisdictions across the world, Bitstamp has employees working in compliance, regulation, legal, risk management, security and internal audit functions, which account for approximately 29% of the company’s workforce.
Top Singapore Large Local Enterprises in Cryptocurrency
TRON FOUNDATION LIMITED
Repeated Company as per the Client -
TOKENIZE XCHANGE PTE. LTD.
Tokenize Xchange is a Singapore-based digital asset exchange that offers affordable rates for trading digital assets in a secure environment. Founded in 2017, it is one of Asia's Leading Digital Assets Exchanges (DAX), offering trading in over 80 cryptocurrencies, including Bitcoin and Ethereum. Tokenize Xchange is one of the few Singapore exchanges that allows customers to purchase cryptocurrencies in Singapore Dollars. Top-ups can be made using a variety of methods, including debit or credit cards, direct bank transfers, StraitsX, GrabPay and stablecoins swaps. Tokenize Xchange is a fully integrated cryptocurrency exchange that provides a frictionless user experience to individual and institutional investors.
ZIPMEX PTE. LTD.
Incorporated in 2018, Zipmex is a Singapore-based investing firm. The company invests in digital assets and focuses on enabling individual and institutional investors to invest safely. Zipmex provides investors with a wide range of options in the digital asset business. The firm provides a platform for individual and institutional investors to trade and invest in digital assets. The Zipmex ecosystem is powered by ZMT. The company believes that purchasing and holding ZMT is the key to more crypto incentives, lower fees and cashback benefits. Zipmex offers personal 24/7 crypto support to its institutional investors, family offices, self-managed super funds and top-tier clientele.
FORIS DAX ASIA PTE. LTD.
Repeated Company as per the Client -
Top Singapore SMEs in Cryptocurrency
PUNDI X LABS PTE. LTD.
Repeated Company as per the Client -
ENJIN PTE. LTD.
Repeated Company as per the Client -
HAKO TECHNOLOGY PTE. LTD.
Hako Technology, operating as Coinhako, is well-known throughout Southeast Asia as a market-leading platform for gaining access to digital assets. Established in 2014, Coinhako has worked hard over the years to expand its product line and services to many nations and markets. One of the most user-friendly platforms for retail purchasers, it boasts comprehensive features, user-centric design, and simple trading processes to enable secure and smooth access to a wide range of cryptocurrencies. As Coinhako users, customers may view and trade real-time prices for all cryptocurrencies, such as Bitcoin, Ethereum, Dogecoin, Cardano, and more. Coinhako collaborates with a slew of market-leading liquidity providers to ensure the best pricing.
COINUT PTE. LTD.
Coins U Trust, also known as COINUT, is a crypto exchange platform in Canada and Singapore, supporting Bitcoin, Litecoin, and Ethereum exchanges with fiat currencies, the Singapore Dollar (SGD) and Canadian Dollar (CAD). COINUT is one of Singapore's first cryptocurrency exchanges, founded in 2013 by one of Litecoin's main creators. It is supported by Silicon Valley's Boost VC, Beijing's Bitmain, and Singapore's National University of Singapore Enterprise. COINUT is regulated as a Money Services Business in Canada under FINTRAC. With the objective of being regulated globally, COINUT is in the process of obtaining licences from the Monetary Authority of Singapore and the Ontario Securities Commission.
DACXI PTE. LTD.
Dacxi is a Singapore-based fintech startup that is focused on the expanding industry of crowdfunding. Dacxi is more than just a cryptocurrency exchange. It's a crypto-wealth platform. Dacxi was founded in 2017 by an entrepreneur with the purpose of bridging the gap between ordinary people and crypto wealth development. The company is pioneering a fairer and smarter method to build wealth in order to democratize wealth and help people flourish. In February 2023, the company announced that Wealth99 will be the new name and logo for its digital wealth platform, Dacxi.com.
HODLNAUT PTE. LTD.
Hodlnaut is a crypto-borrowing and lending platform that assists investors to increase the return on their investments. Instead of merely earning on off-price increments, cryptocurrency investors can now earn interest on their crypto and realize its full worth through yield farming. The platform works on AWS' secure cloud infrastructure, and all traffic is protected with SSL. Hodlnaut also employs two-factor authentication to prevent user credentials from being compromised. The company provides fixed-term deposits to cryptocurrency holders who wish to earn industry-leading interest rates while making better use of their idle assets. Bitcoin, Ethereum, Dollar Coin, Tether, Wrapped Bitcoin, and other assets are supported.
BITFIA LABS PTE. LTD.
Established in 2017, Bitfia Labs is a Singapore-based technology firm with a team of cryptocurrency and blockchain professionals. Bitfia Labs introduced iPint, a cryptocurrency payment gateway that enables businesses to accept cryptocurrencies as payment for goods and services. PINT, a decentralized and secure wallet and peer-to-peer marketplace, is powered by Bitfia's technology. The wallet supports Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Dogecoin, Dash, and Stellar. To meet the demand for a strong, safe, and trustworthy peer-to-peer buying and selling platform, Bitfia Labs has a decentralized, non-custodial P2P marketplace for Bitcoin and Ethereum. Using its DeFi technology, two individuals who have never met can engage in crypto-fiat trading without fear.
NAGAYA TECHNOLOGIES PTE. LTD.
Incorporated in 2018, Nagaya Technologies developed Nagaya (NGY) – a hybrid crypto-asset backed by gold and subsidiary projects. The company provides a structure that allows its gold reserve to develop and expand while also increasing the number of subsidiary projects, thereby fostering public trust in Nagaya (NGY). In 2022, Nagaya Technologies was awarded the Grand Prize in the category of Nickel Industry (Digital IT Asset) at the 25th Jang Young-sil International Science and Culture Awards in South Korea. Nagaya Technologies demonstrates greater stability than other cryptocurrencies due to its unique composition of gold reserves, actual projects and transparency.
TRIPLE A TECHNOLOGIES PTE. LTD.
Repeated Company as per the Client -
TEE-COIN PTE. LTD.
TEE-coin is a reward token that can be exchanged for a variety of cryptocurrencies via the ChatTee platform. Users will be able to use the TEE-coin with merchants who join the platform in the future. Aside from platform activities, ChatTee enables TEE-coin to be topped up with major cryptocurrencies, allowing crypto enthusiasts to swap their crypto for real-world products and services using TEE-Coin. The company is also collaborating with other reward system programmes, mileage systems, and e-commerce platforms to enable the conversion of TEE-coin for points and miles. The firm has offices in Singapore, Japan and Vietnam.
