Coinbase In Singapore: October 2022
Nasdaq-listed cryptocurrency exchange Coinbase (NASDAQ: COIN) has secured the highly-desirable in-principle approval (IPA) from Singapore’s Monetary Authority of Singapore (MAS). The approval means the giant American cryptocurrency exchange can offer regulated digital payment token (DPT) products and solutions in the country, making it a licensed payments provider in Singapore.
This announcement made notable ripples across the crypto space, highlighting its relevance to the industry. What does this mean for Coinbase and the cryptocurrency industry?
Here’s the summary of what you need to know:
- The IPA licensing is highly sought after in Singapore, with only a handful of crypto companies securing one.
- Coinbase is forging ahead with its international expansion plans despite the unfavorable cloud hovering over the crypto industry.
- Comments from a Coinbase Chief on the latest development.
- Singapore has become the crypto hub in Southeast Asia.
- Singapore’s crypto regulatory stance.
Source – Coinbase | Coinbase in Singapore
The In-Principle Approval: One of Singapore’s Most Coveted Licenses
The latest approval puts Coinbase on the list of the likes of crypto service providers, such as Crypto.com, Genesis, Sparrow, and DBS Vickers, which operate as licensed crypto payments firms in the country.
To understand how coveted this licensing is for crypto companies, about 180 crypto service providers applied for the Singaporean license in 2021 alone. However, the country has only awarded 17 IPAs and licenses to DPT platforms in total.
Source – Twitter | Coinbase in Singapore
Following the announcement, Coinbase has hit the ground running by increasing the pace of its recruitment of staff and training product managers and engineers to be proficient with Web3 technologies.
Before now, Coinbase’s venture division, Coinbase Ventures, has invested in over 15 Web3-related startups in Singapore since 2019. Also, the crypto company previously put together a special team to focus on investments in the Asia-Pacific region. Currently, Coinbase has a workforce of about 100 people in Singapore.
In a press statement, Coinbase expressed: “Today’s announcement underlines our commitment to Singapore as a regional hub that allows us to unlock new capabilities for Singapore-based institutional and corporate clients in the future.”
Coinbase is Forging Ahead Despite Previous Setbacks
Coinbase’s IPA achievement comes amid the unrelenting bearish turmoil in the cryptocurrency market. From its peak in November last year, over $2.1 trillion worth of investments have been wiped away from the crypto market, with most crypto assets, such as Bitcoin (BTC) and Ethereum (ETH) wallowing in losses exceeding 50%.
Source – Coin360 | Crypto Heatmap
Due to the persistent loss of value in crypto assets over the past months, many crypto-based firms have been forced to cut operations and overhead, with several going bankrupt and out of business. Coinbase was not exempt from this cloud of struggle, with the behemoth cryptocurrency exchange announcing in June that it was laying off 18% of its workforce.
Regardless, Coinbase continues to forge ahead in its plans to expand its operations and reach globally.
Coinbase in Singapore:Words from a Coinbase Executive
Speaking to the press on the recent progress with its IPA in Singapore, Hassan Ahmed, CEO of Coinbase Singapore and Coinbase’s regional director for Southeast Asia, explained that Singapore is a target institutional market for the company in Asia, as more businesses in the region show interest in gaining crypto exposure.
Source – Bloomberg | Coinbase Singapore CEO
Coinbase recently noted that it was forging relationships with Web3 community groups in the region, such as the Association of Crypto-Currency Enterprises and Start-ups Singapore (ACCESS) and the Singapore Fintech Association (SFA). The CEO of Coinbase Singapore also noted that the exchange was working with the local crypto and Web3 industry in the region to enforce fair regulations and to give information to Advisory.sg, a non-profit organization that focuses on the younger population. Ahmed noted:
“We collaborate with industry associations to promote dialogue with policymakers and ensure balanced regulations and a pragmatic approach to [the] regulatory framework for digital assets.”
“On the employment side, crypto as an industry is exciting but often confusing, so we are working with career exploration non-profits like advisory.sg to provide guidance to their members.”
Coinbase In Singapore: Why is the Coinbase News in Singapore Relevant?
Singapore has, in several ways, become the cryptocurrency hub of Asia. According to one of the Big Four accounting organizations KPMG, inflows into Singapore’s crypto and blockchain industry jumped to $1.48 billion in 2021, a tenfold increase from the previous year and roughly 50% of the Asia-Pacific total in 2021.
Another Big Four accounting firm PwC noted that 6% of all capital in the global crypto industry is situated in Singapore — alongside Switzerland and Hong Kong — ranking in third place behind the US and UK.
Singapore, along with Hong Kong, is one of Asia’s major centers for investment banking and asset management. That said, Singapore is determined to take the lead in financial technologies, such as blockchain and cryptocurrency.
What is the Regulatory Outlook for Crypto in Singapore?
In recent times, Singapore has served as a kind of refuge point for many cryptocurrency companies and service providers fleeing regulatory crackdown elsewhere. The Asian-Pacific nation also engaged in developing a licensing regime for the local crypto industry, which drew crypto companies hoping to leverage this endorsement en masse.
Source – KrAsia | Singapore Crypto License
While the Monetary Authority of Singapore’s pronouncements in the past has expressed a supportive attitude to crypto-related businesses, some companies argue that the central bank’s reassuring rhetoric masks an occasionally strict regulatory approach. The sparse number of companies to have secured licensing from the institution is a testament to this claim.
Previously hosting over 200 crypto businesses, several have closed or relocated as a result of the licensure regime, according to Chia Hock Lai, co-chairman of the Blockchain Association Singapore. The most well-known of these exits is Binance, the largest cryptocurrency exchange in the world, which fled Singapore in 2021 after it came under intense international scrutiny.
