In a speech at the opening of the Point Zero Forum on 22 June 2022, Heng Swee Keat, Singapore’s Deputy Prime Minister and Coordinating Minister for Economic Policies, said that the country is keen to work with “responsible” blockchain and digital asset players for the growth of Singapore’s crypto ecosystem. The recent comments from Swee Keat have boosted optimism among the Asian crypto community which now considers Singapore the top location for crypto innovation in the region.
The Monetary Authority of Singapore, the financial regulatory authority of the city-state, introduced some tough measures recently to eliminate illegal crypto activities in the region. At the same time, MAS has reinforced its commitment to crypto innovation as the island nation has started granting licenses and in-principle approvals to digital asset services providers who are working towards a sustainable cryptocurrency economy.
In the past 24 months, 11 digital payment token service providers received licenses and in-principle approvals in Singapore. The changes in Singapore’s cryptocurrency regulations for the issuances of licenses show that the city-state is focusing more on “quality” than “quantity”.
While the country’s tough stance against “not so responsible” crypto players may decrease the number of license applications in the coming years, it will ensure consistent growth across Singapore’s crypto and blockchain ecosystem, regardless of what’s going on with the prices.
In terms of crypto ownership, Singapore is one of the top locations in the world. According to the Finder Cryptocurrency Adoption Index, 21.9% of people in Singapore own cryptocurrency assets, a figure that gives the city-state 4th rank in the list of the global crypto ownership list. In terms of crypto ownership, the country is ahead of Australia and Indonesia. Retail and institutional adoption of crypto and blockchain products has increased significantly in the last few years.
Slow and Steady Approach
Farah Mourad, Senior Market Analyst at XTB MENA, believes that the recent strict regulations may slow down the country’s rapid expansion in the cryptocurrency ecosystem, but it will help Singapore become a more sustainable crypto hub with a focus on the long-term growth of the digital asset ecosystem.
In terms of GDP per capita, Singapore is the world’s 4th largest economy. The country witnessed significant growth in the fund management industry, entrepreneurial ecosystem, and information technology, the essential factors for the growth of crypto firms.
According to Liebau, Singapore’s diverse location has played an important role in its growth as a crypto hub. “Singapore has a vibrant and diverse crypto ecosystem including fund managers, startups, service providers, academic researchers, and the Blockchain Association of Singapore that fosters collaboration amongst a wide variety of members,” the CIO of Modular Blockchain Fund, said.
The recent crypto winter forced many companies in the digital asset ecosystem to cut thousands of jobs, some even closed their operations. Countries around the world are now realizing the need for a sustainable crypto ecosystem to keep up with the latest innovations even during market turmoil. As regulations play an important role in the growth of emerging crypto companies, Singapore’s recent changes in crypto regulatory infrastructure coupled with the growing adoption and its strategically important location have made the island nation a strong contender to be a crypto hub in Asia.