Singapore authorities are taking significant steps to position themselves as key players in the crypto economy. The Monetary Authority of Singapore, which regulates banks and financial firms, are exploring various ways to regulate crypto across the country.
"We think the best approach is not to clamp down or ban these things. But not to get into this game, I think risks Singapore being left behind. Getting early into that game means we can have a head start and better understand its potential benefits as well as its risks." said Mr Ravi Menon, managing director of the Monetary Authority of Singapore (MAS)
Singapore is not only the place attracting crypto builders. Locations such as Dubai, Miami, El Salvador, Malta and Switzerland are also making good efforts to attract companies.
DBS Group, the largest bank in Singapore, expects to double the number of members on its new platform for cryptocurrency trading, growing by 20-30% annually for the next three years as digital tokens gain acceptability. It is also offering tokenisation services.
Singapore's approach has attracted crypto firms from Binance Holding, which has had a series of run-ins with regulators worldwide, to Gemini, a US operator targeting institutional investors, to set up a base. Some 170 companies applied for a MAS licence, taking the total number of firms seeking to operate under its Payment Services Act to about 400 after the law came into effect in January last year.
Mr Menon said the benefits of having a well-regulated local crypto industry could also extend beyond the financial sector. "If and when a crypto economy takes off in a way, we want to be one of the leading players," he said. "It could help create jobs, create value-add, and I think more than the financial sector, the other sectors of the economy will potentially gain."