Singapore is a country where big banks love Bitcoin and Ethereum. Curious Contrasts in the City-State. Last December, the Monetary Authority of Singapore (MAS) declared a hundred crypto players persona non grata. Last July, it was against crypto trading intended for the general public that the regulator hardened its tone. His stance toward retail trading contrasts sharply with his accommodating attitude towards blockchain projects, hedge funds, and big banks. DBS Bank, for example, has just extended its Bitcoin and altcoin trading services to its wealthy clientele.
DBS Bank expands crypto trading to wealthy customers.
By the number of its assets under management (291 billion dollars at the end of 2021), the DBS is the largest bank in Southeast Asia.
And the DBS loves cryptos. Or rather, the vast financial windfall brought by Singapore-based blockchain projects and the interest of local traditional funds for cryptos.
💡 DDEx: the very first exchange launched by a commercial bank
In order not to miss the cryptocurrency train, the DBS, therefore, launched its own exchange in December 2020. Dubbed the DBS Digital Exchange (DDEx) and operated by brokerage subsidiary DBS Vickers, the exchange was accessible only to large corporations, SMEs, asset managers, and other hedge funds.
Trading was initially opened on four cryptos: Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), and Bitcoin Cash). Through a dedicated web interface, accredited customers could therefore exchange cryptos with their balances denominated in USD, SGD, JPY, and HKD. Custody of the tokens is provided by the exchange, similar to what Revolut offers its customers in Europe.
Among the partners of the DBS is the Singapore Stock Exchange (SGX). The parastatal company owns 10% of the DDEx platform.
Until now the DDEx had about 1,000 accredited clients and brewed an annual volume of 1 billion dollars. June saw a jump in purchases of BTC (+300%) and ETH (+65%) on the platform, as reported by our colleagues at Cointelegraph.
The DBS has decided to extend access to its wealthy, handpicked clientele: it will be necessary for the cryptophile client to hold at least $246,000 in cash.
The expansion of the target should make it possible to increase the DDEx from 1,000 to 300,000 customers by the end of 2023.
BTC, ETH, XRP, and BCH are listed on the DDEx exchange - ddex.dbs.com
Singapore is a stronghold of institutional crypto trading.
The Three Arrows Capital (3AC) hedge fund disaster had at least that merit highlighting the importance taken by cryptocurrencies in institutional trading in Singapore.
The majority of hedge funds, family offices, and local investment funds hold BTC and altcoins in their portfolio. As of January 2020, the corporate tax regime (governed by the Inland Revenue Authority ) exempts capital gains on crypto-assets from taxes and other levies.
Several vital players in cryptocurrency mining have settled there. All are powered either by hydroelectricity or solar power. Saitech, the largest of them, even joined the Nasdaq.
But it is above all “infrastructure” blockchain companies that the government intends to seduce. In its report on local fintech in 2021, the firm KPMG highlighted that more than 30% of fintech investments in Singapore were in technologies underlying crypto.
If total investments in the sector have increased from 2.5 billion to more than 3.9 billion dollars at the end of 2021, the portion linked to blockchain projects has been multiplied by 13!
But desert announced for retail crypto trading.
In three years, the tide has turned for crypto exchanges in Singapore.
We remember that in 2019, the MAS unveiled a bill aimed at creating a specific license for crypto exchanges and digital asset payment providers.
A vision of “ Silicon Valley of crypto ” which had earned it more than 300 applications for approval. Several big names were in the running: Alphabet (parent company of Google), Alibaba, Binance, FTX...
⚠️ Then at the end of 2021, the first change of tone. The regulator has decided to get tough on retail cryptocurrency trading, citing the risks of over-indebtedness, money laundering, and the financing of illegal activities. Since 2017, advertisements were already prohibited. But this time it was about further restricting access to leveraged trading.
103 companies pay the price. All operating under a suspensive regime, their license exemptions are revoked. Among them, are the subsidiaries of Revolut, BitGo, and Bitxmi. The big guns such as Bitstamp, Coinbase, Binance, and Gemini escape the ax but some, like Binance, decide to pack up anyway.
⚠️ Last June, the MAS drove the point home by tightening the conditions for obtaining crypto-stock market approval. The semantics employed are not misleading, with regulator spokesman Sopnendu Mohanty citing a deliberately ' brutal and relentlessly tough ' stance to make the process ' draconian ' for applicants.
💡 The position of the MAS contrasts with the enthusiasm of the population for cryptocurrencies.
Several studies show that the country has a head start when it comes to cryptocurrency adoption.
A UNCTAD report shows that Singapore is, among developed countries, the one with the highest proportion of inhabitants holding crypto-assets ( 9.4% at the end of 2021, see image below ).
An average score that hides significant disparities, with a peak of more than 22% among 25 to 45-year-olds!
A trend toward investment is certainly linked to individual savings capacity: GDP per capita is one of the highest in the world. The 5.7 million resident Singaporeans have an average annual income of $59,800, almost 55% higher than that of the French!
Source: UNCTAD study
In Europe, the latest version of the MiCA law does not seem to have deterred players such as Binance. They are therefore preparing to apply for the future “European service provider” certification inspired by the PSAN certification set up by the AMF. In the meantime, they are advancing their pawns – we were recently talking about FTX, Coinbase, and even Revolut.
0 Comments