Disclaimer: Opinions expressed below belong solely to the author.
Two cryptocurrency news stories on the same day is a pretty rare occurrence for Singapore, especially when they involve the Singapore Stock Exchange (SGX) and DBS Bank’s Digital Exchange (DDex), the digital assets trading service of DBS Bank, the largest bank in Southeast Asia by asset size.
Both CEOs issued seemingly conflicting statements about cryptocurrency trading on Singapore’s stock exchange, which must have raised eyebrows. However, I have now phased out what could be a fascinating message about listing cryptocurrencies on the Singapore Exchange.
SGX says no Crypto listing, for now
Appearing at the Reuters Next APAC leadership summit on July 9, 2024, SGX CEO Loh Boon Chye answered an audience-sourced question about “whether SGX would be open to listing any crypto”. He responded that SGX had no immediate plans to allow cryptocurrency listings, as “conditions were still not ripe for such a move.”
“I think for any new product launches, it’s important for this to have a sustainable ecosystem support,” he said. “That really means demand, that means governance, that means structure.”
“The ecosystem, I feel, at this point in time, is not ready for such products in Singapore.”
Loh Boon Chye, CEO Singapore Stock Exchange
Added Loh, “You never say never. As time evolves and the ecosystem comes together, we are always known to be the most innovative exchange or platform in the world.”
DDex is studying stablecoin and Ethereum staking
Vulcan Post has previously written about DBS Bank’s cryptocurrency assets, and Lee Wee Kian, the CEO of the bank’s Digital Exchange (DDEx), has reported surges in the first five months of 2024.
CEO Lee Wee Kian was speaking to the Straits Times (on July 9, 2024) and reported that the value of digital tokens in the exchange had nearly tripled over the January-June period from the same period last year, with the number of active clients increasing by 36% in the same period.
This surge in activity coincided with an approximate 50% increase in the overall market capitalisation of cryptocurrencies during the same period.
Lim added that the bank aims to expand its offering of digital assets and is now studying the listing of stablecoins and how its clients can earn rewards through Ethereum staking.
“Professional investors are increasingly viewing digital assets as a legitimate part of their alternative portfolios.”
Lim Wee Kian, CEO DBS Digital Exchange
Undertstanding the context
At this point in history, there is massive interest in the financial market for cryptocurrencies linked to stock exchanges via exchange-traded funds (ETF). Crypto ETFs have recently appeared on the Hong Kong exchange, and, thus, it is only natural that the Reuters summit’s audience was interested in the SGX CEO’s response, which was always going to be no – Singapore’s financial regulator, the Monetary Authority of Singapore (MAS) has clearly stated that it has not approved spot Bitcoin ETFs, and other digital payment tokens (DPT) for offer to retail investors, citing the high volatile and speculative nature of cryptocurrencies as unsuitable for retail investors.
So why was the question asked? On the 0.01% chance that he had new information to share.
Mr. Loh’s answer was, in fact, similar to a statement SGX issued in response to the MAS decision.
DDex CEO Lim Wee Kian’s statements regarding listing stablecoins seem to contradict SGX CEO Loh Boon Chye’s reply to Reuters. However, they are both on the same spreadsheet – The context of CEO Loh’s reply was regarding the spot crypto ETFs positioned for retail investors, which MAS has disallowed.
However, MAS has not issued any similar guidance for accredited investors or institutional investors, who are DDex’s main clientele. This means that digital assets such as Ethereum staking and stablecoin listing could come online with the SGX in the future if they are restricted from retail investors, and the DDex statements should be taken as the bank researching into the future implementation of these digital assets.