Singapore is always well-known for its reputation for innovation and ease of doing business globally. In a recent report, Singapore is ranked number seven for the most innovative economy globally by the World Intellectual Property Organistion (Wipo) and non-profit research firm Portulans Institute and number two in the ease of doing business globally by the World Bank.
However, the country’s regulator has publicly warned against cryptocurrency and tightened the regulation around it. Does Web3 remain part of Singapore’s roadmap and an attractive destination for Web3 companies to set up shops?
The crypto world was set ablaze when the Monetary Authority of Singapore (MAS) announced the launch of the Payment Services Act (PSA) in 2019 where the Act covers cryptocurrency.
Overnight, Singapore seems to be the rising star in crypto and becoming the next “Crypto Hub”. Many crypto founders and companies swarm over to Singapore to set up companies and headquarters to apply for licenses with the regulator.
Over the next two years, the approval for the license application has slowed down, and to date, only a handful of applicants have obtained the in-principle approval or full license. Major crypto companies like Binance have withdrawn their application and moved to Dubai.
Also Read: A walk through the growth of e-commerce in Singapore
The regulator has also come out publicly to warn retailers of the high risk of cryptocurrency and issued a series of policies and guidelines deemed as tightening the regulation around cryptocurrency, including the ban of advertising by crypto companies in Singapore.
Since then, many industry players have been asking if Singapore still remain the ideal destination for crypto and even Web3.
Did Singapore make a U-turn?
In the media, there have been seemingly contradicting reports on Singapore’s position on whether they are welcoming crypto players to set up in Singapore and building itself as a crypto hub or clamping down on the crypto industry in Singapore.
This might cause some confusion for the industry players, and this eventually led the regulator boss, Ravi Menon, to come out and clarify the regulator’s position during a speech on 29 August 2022 to clarify their stance on cryptocurrency.
In his speech titled “Yes to Digital Asset Innovation, No to Cryptocurrency Speculation”, Menon shared that cryptocurrency is just a sub-set within the whole digital asset ecosystem, but it received the highest attention in the media and public.
In the same speech, Menon reiterates that the regulator’s vision “is to build an innovative and responsible digital asset ecosystem in Singapore”. And in the digital asset ecosystem, it is more than just cryptocurrency.
A case in point, MAS has collaborated with the private sector on various CBDCs projects and is one of the frontrunners in this area. Second, in the recent industry transformation roadmap, the tokenisation of assets is one of the core pillars that Singapore is looking to grow in the next five years.
Companies leveraging on tokenization have also set their roots in Singapore. BondEvalue and ADDEX, which tokenise bonds and private equity, respectively, are examples of two local companies based in Singapore that are using tokenisation technology to innovate.
Therefore, in short, the regulator has set its position clear that it does not welcome the speculative nature of cryptocurrency but embraces the technology and innovation of digital assets and the potential it will bring to the financial industry and Singapore.
Uniquely Singapore
Singapore has uniquely positioned itself as the intersection between the digital asset world and the financial world. For the latter, Singapore is already well established as a global financial hub alongside others like London, Hong Kong and New York.
Singapore also has had one of the most vibrant venture capital (VC) scenes in recent years. Many VCs from around the world have arrived in Singapore looking for projects, either traditional or Web3 space.
A common observation by the project owners is that there seems to be “more VCs and funds available” in Singapore than the number of projects seeking funding, and the environment in Singapore is conclusive for both the VCs and projects to meet and discuss their paths forward.
It would be a great place for startups and projects to set up a base here in Singapore, especially if they need to look for access to liquidity and funds.
Singapore is a hub for meetings, incentives, conferences, and exhibitions (MICE), with many international events and conferences held here. While during the COVID-19 period, the MICE sector took a major hit, as the borders are opened now globally, and travel is resuming for many, Singapore, with its open COVID-19 policy, has ramped up the MICE sector.
Also Read: Web2 founders, get ready for Web3 before 2025: Insights from Echelon 2022
During the F1 week, we witnessed many major international events and conferences being held in Singapore. One of the most vibrant events held during F1 would be Token 2049. Token 2049 is the marquee event for crypto and Web3, with many international Web3 players and thought leaders gathering for the event.
And this year, for the first time ever, this event was held in Singapore and attracted thousands of international attendees to Singapore. This is a testimonial of global talents and companies that can come to Singapore easily and the infrastructure to support it.
Is Singapore suitable for me?
While critics were quick to highlight the seemingly tightening of regulation and stance towards cryptocurrency, international crypto events and companies have been coming to Singapore in recent years, followed by some of the Web3 bigwigs who choose to set up their headquarters or even take up residency in Singapore.
Hence, some might be wondering if Singapore is suitable for them to set up shops in Singapore or run their projects here. Singapore provides stability, a comfortable environment, and easy access to traditional finance and funds, but at the same time, Singapore takes a tough stance against speculative assets, especially if they are targeted at retail and strong regulations that some might find hard to grow or innovate.
The key, then, is to find the balance between both, and Singapore could be an ideal place for projects and Web3 to grow. If not, then you might need to look elsewhere that might be more suitable for your projects.
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