Why Singapore is a Crypto-Friendly Country for Businesses
Singapore is a small but influential nation in Southeast Asia that has embraced cryptocurrency and blockchain technology. The country has a supportive regulatory environment, a vibrant crypto ecosystem, and a reputation for innovation and openness. In this article, we will explore why Singapore is a crypto-friendly country for businesses and what opportunities it offers for the industry.
Singapore's Regulatory Approach to Crypto
One of the main reasons why Singapore is a crypto-friendly country is its clear and balanced regulatory approach to crypto. The Monetary Authority of Singapore (MAS), the central bank and financial regulator, has recognized both the benefits and risks of crypto and has adopted a pragmatic and risk-based framework to oversee the sector.
The MAS does not regulate crypto as a legal tender or a security, but as a property that can be used for payments, trading, and transfers. The MAS also does not stop banks from doing business with crypto firms, as long as they conduct proper due diligence and risk management. The MAS has been working with banks to provide guidance on how to vet crypto clients and prevent illicit activities, according to a Bloomberg report.
The MAS has also introduced a licensing regime for crypto service providers under the Payment Services Act, which came into effect in January 2020. The act covers activities such as account issuance, domestic money transfer, cross-border money transfer, merchant acquisition, e-money issuance, digital payment token service, and money-changing service. Crypto service providers have to apply for one of three types of licenses depending on their risk profile: money-changing license, standard payment institution license, or major payment institution license.
The MAS has also been proactive in fostering innovation and collaboration in the crypto space. It has launched several initiatives such as Project Ubin, which explores the use of blockchain for clearing and settlement of payments and securities; Project Guardian, which looks into the application of DeFi and asset tokenization; and Project Dunbar, which aims to develop a cross-border platform for central bank digital currencies.
Singapore's Crypto Ecosystem
Another reason why Singapore is a crypto-friendly country is its thriving crypto ecosystem. The country hosts many local and global crypto firms that offer a range of services such as exchanges, wallets, custodians, brokers, asset managers, market makers, liquidity providers, research firms, education platforms, media outlets, and more.
Some of the notable crypto firms based in Singapore include Binance, Huobi, OKEx, KuCoin, Bitfinex, Coinhako, Liquid, Zilliqa, Kyber Network, Aave, MakerDAO, Synthetix, Terraform Labs, Three Arrows Capital, CoinDesk Singapore Bureau (that's us!), CoinMarketCap (our sister company!), and more.
Singapore also has a vibrant crypto community that organizes events, meetups, hackathons, workshops, conferences, and more. Some of the active crypto groups in Singapore include Bitcoin Singapore Meetup Group (the oldest Bitcoin meetup group in Asia), Ethereum Singapore Meetup Group (the largest Ethereum meetup group in Asia), Blockchain Association Singapore (a non-profit organization that promotes blockchain adoption), ACCESS (a trade association that represents the interests of crypto businesses), SGInnovate (a government-backed entity that supports deep tech startups), Tribe Accelerator (a blockchain-focused accelerator program), LongHash Ventures (a blockchain incubator and investor), and more.
Singapore's Crypto Opportunities
The last reason why Singapore is a crypto-friendly country is its potential opportunities for the crypto industry. The country has a strategic location in the heart of Asia-Pacific region that connects it to many emerging markets such as China, India, Indonesia, Vietnam, Thailand, Malaysia, and more. These markets have huge populations that are underserved by traditional financial services and could benefit from crypto solutions.
Singapore also has a strong reputation for being a global financial hub that attracts many investors,
entrepreneurs, talents, and customers. The country has a stable political system, a sound legal system, a business-friendly environment, a high-quality infrastructure, a diverse and multicultural society, and a high standard of living. These factors make Singapore an attractive destination for crypto businesses to establish their presence and expand their reach.
In conclusion, Singapore is a crypto-friendly country for businesses because of its clear and balanced regulatory approach, its thriving crypto ecosystem, and its potential opportunities for the crypto industry. The country has shown its openness and support for crypto and blockchain innovation and has positioned itself as a leader in the region and the world. If you are looking for a place to start or grow your crypto business, Singapore might be the right choice for you. 😊
