Has Singapore served its time as a crypto paradise?3 min read
Colorful trees that glow at night, a water-spouting lion and a boat-shaped infinity pool that promises the best view of the skyline at 200 meters above sea level. Singapore is an eye catcher.
The Asian city-state of the lions has also occupied the place of a financial paradise for companies and service providers in the crypto space for some time. Singapore is now home to crypto companies such as CoinGecko or Crypto.com.
However, the Singaporean government has recently taken a tougher stance on crypto companies. As early as January of this year, the Monetary Authority of Singapore (MAS) – Singapore’s central bank and financial market regulator – issued new guidelines that were intended to drastically restrict the marketing of cryptocurrencies such as BTC.
The then largest crypto machine operator Daenerys & Co. was brought to its knees. The result: In the streets of Singapore you can no longer withdraw coins from the machines.
“Brutally and unrelentingly tough”
“We have zero tolerance for bad behavior in the market,” Singapore’s fintech chief Sopnendu Mohanty said in his latest statements to the Financial Times. Potential misconduct in the crypto scene should be countered “brutally and relentlessly”. An announcement that is at least partly due to the recent Terra crash.
“And that’s exactly what I think is good, that action is taken against bad projects, which have often exploited Singapore for openness,” explains Dr. Julian Hosp, CEO of local company Cake DeFi. “It makes it easier for good projects, like us at Cake DeFi, for example, because as a customer you can clearly see that everything fits.”
So is the Wild West over for BTC and Co. in the Asian island state? Yes, says Hosp, in a certain way it is: “Singapore has certainly had its day as a crypto paradise where you can do whatever you want.” So there is no free pass for crypto service providers there. But it doesn’t have to be. The rules are “fair and clear and thus offer a good mix of business friendliness and customer security,” adds Hosp. “This will establish Singapore much more as an international crypto hub as customers worldwide will know that Singapore companies can be trusted.”
Does BTC and Co. have to give way to the state?
One or the other is likely to be increasingly worried about the future of the former crypto paradise. Is the government hand pushing too hard?
While Southeast Asia’s largest bank, DBS, recently backed down on crypto services, the government is looking to explore the DeFi sector with JP Morgan. Speaking to the Financial Times, Mohanty also revealed that he expects a central bank digital currency (CBDC) to be launched within the next three years.
Hosp sees CBDCs as a double-edged sword: “Personally, I see any form of CBDC, especially where there is no privacy offering, while positive for crypto as a whole as people are made so much more aware of the issue, but always critical for personal freedom .”
A balancing act that the Singaporean government is trying to master: “As far as I’ve understood from Singapore so far, they want to give the private and public sectors parallel opportunities, which I very much welcome,” says Hosp.
Axie Infinity – the return of AXS rewards for the best positioned players