Singapore has pulled ahead of its rivals in the race to become Asia’s digital wealth hub, and the country’s financial watchdog has pledged to provide further regulatory clarity to promote adoption.
In 2024, the Monetary Authority of Singapore (MAS) issued licenses to 13 Virtual Asset Service Providers (VASPs), including exchanges Gemini, OKX, and South Korea’s Upbit, liquidity provider GSR, ‘crypto’ bank Anchorage, and depository BitGo. In contrast, Hong Kong, one of Singapore’s biggest rival financial centres, issued less than half that number as it continued to be conservative.
MAS will continue to provide this clarity and refine its framework “to address risks as they arise and facilitate innovation as appropriate.” show off Managing Director Chia Der Jiun in a recent interview with the local newspaper Business Times.
The regulator, the de facto central bank of Singapore, has adapted its approach to market evolution. Initially, it focused on combating ‘crypto’ crimes such as money laundering, implementing the Payment Services Act in 2019. It then evolved its approach to focus on consumer protection, including requiring fund segregation.
His most recent focus became stablecoins such as payment and tokenization become more popular. This aligns with a broader global emphasis on bringing stablecoins into the perspective of national regulators. The European Union for example for the first time implemented the stablecoin facets of the Markets in Crypto-Assets (MiCA) framework in the middle of last year.
“Clearly, they were early movers of stablecoins. In terms of APAC in a regulated market, Singapore is clearly the leader. thinks John O’Loghlen, Coinbase’s managing director for the Asia-Pacific region.
One factor that has set Singapore apart from Hong Kong and other major Asian financial centers is a “risk-adjusted approach” that favors both retail and institutional players, says William Croisettier, whose ZKcandy caters to on-chain players.
“Singapore also makes it easy for new crypto companies to interact with local banking partners, a provision that is considered a luxury in other parts of the world,” he said. said a news outlet.
“Singapore’s framework encourages interaction between new entrants and established institutions,” adds Ben Charoenwong, an associate professor of finance at the INSEAD business school.
David Rogers, the chief executive of ‘crypto’ liquidity provider B2C2, agrees. He said Bloomberg that the city-state approach makes it “a safe, long-term choice for a regional hub.”
Tokenization has been central to Singapore’s blockchain progress in recent years. MAS has been researching tokenization for years under Project Guardianwhich was launched in 2022. Since then, the initiative has brought together nearly 50 global companies, ranging from politicians such as the United Kingdom’s Financial Conduct Authority (FCA), the International Monetary Fund (IMF), and the Deutsche Bundesbank to financial behemoths such as JPMorgan. (NASDAQ: JPM), Moody’s (NASDAQ: MCO), Fidelity, Citi (NASDAQ: C), UBS (NASDAQ: UBS), and Ant Group.
Caution is still critical for Singapore. The country was home to Three Arrows Capital (3AC), one of the biggest collapses in the ‘crypto’ world and a key puzzle piece in the 2022 ‘crypto contagion’ that wiped out hundreds of billions of dollars. Further, if FTX collapsedSingaporeans were among the most affected, along with the city-state contribute the second-highest number of FTX users after South Korea.
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