The ever-changing and developing crypto and blockchain scene has never failed to keep us on our toes. The second half of the year saw more ringing endorsement and support of Singapore as it strives to be a global crypto hub.
We saw more local crypto exchanges awarded licenses to operate in Singapore, with the Republic’s central bank announcing more projects in support of the “digital Singapore dollar”.
At the same time, we saw the Monetary Authority of Singapore (MAS) double down on Binance and suspending local crypto exchange Bitget over Army Coin. While cryptocurrency was once seen as an alternative and esoteric, it is quickly becoming ubiquitous and as commonplace as owning an iPhone.
The cryptocurrency space is replete with innovation, and while it is capricious, it is a space to keep an eye on. Here’s a look at some of the key developments in the local crypto scene that might hint at the trends for the year ahead:
The Binance debacle
The second half of the year saw the Singapore arm of Binance come to a close. It was quite the ride that began with a series of regulatory crackdowns on Binance’s operations worldwide.
In September 2021, Binance received an order from MAS to stop providing payment services to Singapore residents.
A representative from MAS reportedly said that the US crypto exchange, which operates Binance.com, is providing unlicensed payment services in breach of the payment services act.
The company was then placed on MAS’ Investor Alert List to warn consumers in Singapore that Binance.com is not regulated or licensed in Singapore to provide any payment services.
Binance.com said in a statement that the company “takes a collaborative approach in working with regulators in navigating this emerging industry” and that it takes their compliance obligations “very seriously”.
Meanwhile, Binance Asia Services (BAS) — a separate entity responsible for crypto exchange platform Binance.sg — responded, saying the move by MAS will not directly impact its services, stressing that it is a separate legal entity from Binance.com.
A couple of days later, on September 5, Binance ceased offerings such as SGD trading pairs and SGD payment options, along with removing the app from Singapore’s Apple App and Google Play stores on September 10.
A month and a half go by, and Binance.com users in Singapore can no longer deposit fiat currencies or buy or spot-trade cryptocurrencies on the platform come October 26.
Most recently, on December 13, BAS withdrew its MAS license application to run a crypto exchange in Singapore and announced that Binance.sg will close by 13 February 2022.
This implies an exit from Singapore from the world’s largest crypto exchange by trading volume, ending years of effort to operate a regulated crypto bourse under the Monetary Authority of Singapore (MAS) oversight.
“Our decision to close Binance.sg was not taken lightly. Our immediate priority is to help our users in Singapore transition their holdings to other wallets or other third-party services,” said Richard Teng, chief executive of Binance Singapore.
Binance.sg users will be notified via email on the next steps to take with the closing of the trading platform. Users will also be required to close all open positions and withdraw their Singapore dollar and cryptocurrency assets by the closing date.
More local crypto exchanges obtain licenses from MAS
Despite the crackdown on Binance, the latter half of the year also saw many local crypto exchanges obtaining licenses or approval from MAS.
In August, Independent Reserve, an Australia-founded crypto exchange, was granted an in-principle approval from MAS under the Payment Services Act. Independent Reserve is one of the first virtual asset service providers (VASPs) to receive in-principle approval for a major payment institution licence in Singapore.
Following that, DBS Vickers is the second to receive an in-principle approval from the MAS to provide digital payment token (DPT) services in August.
There were subsequently more shifts in the crypto space with local fintech firm FOMO Pay granted new licenses from MAS to operate three new activities: Merchant Acquisition Service, Domestic Money Transfer Service, and Digital Payment Token Service.
With these licenses, the company now gains a strong foothold to provide a robust range of credible payment-based solutions that will drive immense value to its clients, including corporates, SMEs and financial institutions alike.
In October, DBS Vickers (DBSV) became the first bank MAS-awarded Major Payment Institution licensee. This license approval means that DBSV, as a member of DBS Digital Exchange (DDeX), will be able to directly support asset managers and companies to trade in digital payment tokens through DDeX.
“Having received formal regulatory approval from MAS, DBSV is now in a better position to support institutional and corporate investors in tapping into the growing potential of digital assets as an investment class. This marks another significant milestone in our ability to provide integrated solutions across the digital asset value chain, from deal origination to tokenisation, listing, trading and custody,” said Eng-Kwok Seat Moey, Head of Capital Markets at DBS and Chair of the DBS DDeX.
In November, things get even more exciting as Coinhako becomes the first non-crypto bank to be issued an in-principle approval from MAS to provide DPT services in Singapore. Coinhako is now working hard “over the coming week” to meet MAS’ requirements to receive the Major Payment Institution licence to provide DPT services in Singapore.
Currently, Coinhako has over 300,000 registered users in Singapore and an average of 150,000 monthly active users.
Another player recently joined the mix. Singapore-based company TripleA becomes the fourth platform in Singapore to be granted a license from MAS to offer DPT services in Singapore under the Payment Services Act in November.
TripleA aims to revolutionise how businesses and customers are connected through blockchain technology and cryptocurrency solutions. It allows online and offline businesses to accept cryptocurrency payments with zero price volatility risk by converting them to local currencies in real-time.
But there were also some crypto exchanges that closed in Singapore
While some were granted approval to operate crypto exchanges in Singapore, there were also some that saw clampdowns or closures.
In December, MAS suspended the local operations of cryptocurrency exchange Bitget after disputes over Army Coin, which is named after Korean idol group BTS’ fan club.
Back in October, Bitget was threatened with legal action by the agency of South Korea’s biggest boy band BTS, Hybe Corporation, over the promotion of digital currency Army Coin, named after BTS’ fan club.
In response to Hybe’s warning, Bitget announced on October 29 that since it is a trading platform and did not create the coin itself, it will not take any responsibility for the listed Army Coin.
Then on November 11, crypto exchange Huobi Global announced that it would be stopping its services to Singapore-based users and closing all their accounts on March 31 2022.
In a media statement sent to Vulcan Post, Huobi Singapore said the strategic move has been planned “to pave the way for Huobi Singapore to establish in Singapore and underscores its commitment to operate as a regulated digital assets exchange platform.”
Huobi Singapore, under Huobi Technology Holdings, is building a global digital assets exchange platform and has already applied for the Major Payment Institution Licence under the Payment Services Act from the MAS.
Coinhako secures a slew of partnerships
The world of cryptocurrency is more than just the buying and selling of coins. We also saw important partnerships in the crypto world that continues to drive the point that digital currency is here to stay.
In September, Coinhako announced a partnership with GrabPay to purchase digital assets instantly on the platform.
“We believe that introducing GrabPay payments is a step in the right direction and is closely aligned with our vision of improving access to crypto,” said Coinhako in a media statement.
Users can look forward to a seamless, hassle-free crypto trading process when they pay with GrabPay. Payment is processed instantly and only requires users to enter a six-digit OTP sent directly to their mobile number to complete the transaction.
A bonafide overachiever, Coinhako also launched Privé in October (no, not the place where you can order a fun cheese platter and wine).
Privé is a digital assets platform for high net worth individuals and institutions. It is open to accredited individual investors and institutional investors with S$100,000 or above in annual trading volume.
Another exciting subset of the crypto world would be the NFTs. November saw the Right Click + Save, Singapore’s first large-scale NFT exhibition jointly held by Coinhako and Appetite.
The exhibition features early artistic explorations around cryptocurrencies, from SarahMeyohas” Bitchcoin (2015) and Robert Alice’s Portraits of a Mind (2019) to the iconic RarePepe genesis NFT.
The show ran from November 7 to November 14, at Fine Art Storage Services in Le Freeport, a high-security storage and display facility in Singapore.
More endorsement of cryptocurrency by major banks
Perhaps one of the surest signs that cryptocurrency is going to change our lives irrevocably is the launch of Partior.
The blockchain-based platform is a joint venture between J.P. Morgan, Temasek and DBS that uses the best parts of the crypto philosophy and merges it with the needs of the traditional banking system.
Partior takes away the convolution in the correspondent banking system and extends 24/7 real-time payments to everyone — irrespective of which bank you bank with. This platform also enables financial institutions to offer their corporate clients the ability to facilitate payments in any currency in any geography in real-time, 24/7.
MAS’ Ravi Menon announced that it is embarking on Project Orchid to build the technology infrastructure and technical competencies necessary to issue a “digital Singapore dollar” should the country decide to do so in the future.
MAS will pursue Project Orchid in close partnership with the private sector, building on the rich findings from the Global CBDC Challenge that MAS launched earlier this year, which received more than 300 proposals from over 50 countries in response to the problem statements that they posed.
In November, OCBC CEO Helen Wong also shared that the bank is considering setting up a digital crypto exchange in Singapore.
Given all these developments in only six months, it’s no surprise Singapore ranked first place for the most dynamic crypto country for the fourth quarter of 2021 in a Global Crypto Ranking by Ireland-based financial tech start-up Coincub.
The city-state’s robust economy, positive legislative environment, and high rate of cryptocurrency adoption are key factors that have contributed to its rise to number one. Singapore has leapfrogged the United States this year thanks to the latter’s uncertain regulatory environment and scaling back of initial coin offerings (ICOs).
Featured image credit: Budrul Chukrut | SOPA Images | LightRocket via Getty Images / MAS