Singapore has officially earned the status of “Asia’s leading crypto-financial hub” after a monumental decision by the Monetary Authority of Singapore (MAS) to grant licenses to several digital payment service providers.
Reportedly, 170 applicants submitted their case for approval, yet only “several” were approved to receive these licenses on the condition that they implement all the necessary measures to meet their demands. Two requests were rejected and 30 were completely withdrawn from consideration due to their “non-compliance with anti-money laundering standards.”
The news broke shortly after the Australian Cryptocurrency Exchange Independent Reserve made its announcement that it had just received its “in-principle approval” for a license as a regulated token service provider directly from the Monetary Authority of Singapore. It said that it was one of the first “virtual asset service providers” to be granted this approval in the city.
Experts in the crypto space expressed their enthusiastic approval. Grace Chong, who is a lawyer at Simmons & Simmons and financial technology and regulatory advisor in Singapore had this to say:
“Technological change is disrupting finance and we are seeing a strong institutional interest in digital assets.”
MAS Moving Towards Drawing In Crypto Companies To Singapore
Chong estimates that there were already 90 digital payment token service providers that were operating under the exemption umbrella in Singapore. In fact, last year, in March 2020, MAD had published a list of companies that were granted an exemption from holding a license under the Payment Services Act (PS Act) of 2019 for a specific period of time.
The Act went officially into effect on January 28, 2020, and its function was to regulate crypto service providers in Singapore.
For those crypto companies that were already operating before the PS Act, they needed to notify the MAS of their operation and were then granted a license exemption.
The permanent license issued by MAS was the final vote of approval for legitimate crypto companies that have long been established.
Jason Davis, associate professor of entrepreneurship and family business at Insead, believes that these incentives will draw more crypto exchanges to seek approval to do business in Singapore:
“Allowing cryptocurrency exchanges to function in Singapore is an important part of the country’s strategy to be friendly with businesses using new types of digital assets… Exchanges may only be the first step in the development of a thriving crypto-ecosystem in the heart of Southeast Asia.”
This recent development is indicative of what could be an open door of opportunity for many crypto companies to come to Singapore to freely do business. Hong Kong, Singapore’s regional rival, meanwhile, chooses to play it safe, abiding by China’s enforcement of stricter regulations and policies. This leaves Singapore as the leader in the Asian crypto-financial hub.
Meanwhile, Beijing seems to be tightening the screws on its regulation of crypto mining and trading. Regulations over Hong Kong are such that it “creates fear in the minds of investors.”
Global Times, an English-language newspaper under the People’s Daily in China also shared the news that:
“By now, nearly 90% of #China’s #Bitcoin mining capacity has been shut down.”
According to Sumit Agarwal, a professor of finance and economics at the National University of Singapore:
“People are realizing that regulators in Singapore are more open to experimentation because it’s a small economy and decisions can be made faster.”
Singapore Is Asia’s Newest Crypto Hub
With so many regulations cracking down on crypto mining worldwide, it is refreshing to know that crypto companies have found a new haven in the heart of Southeast Asia.