Singapore Emerges as the Top Crypto-Friendly Nation globally
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Singapore, a key player in blockchain technology and cryptocurrency adoption, boasts a conducive regulatory environment, well-defined legal standards, and a strategic position as a global financial center, enhancing its appeal to crypto businesses and innovators.

BeInCrypto interviewed Alex Svanevik, CEO and Co-founder of Nansen, a Singapore-headquartered blockchain analytics firm, to delve into the aspects that make Singapore one of the world's most crypto-friendly nations.

Leading the Global Charge in Blockchain Innovation

Countries that prioritize talent investment, infrastructure development, and regulatory frameworks are primed to excel in digital innovation and transform global industries.

In 2024, Singapore topped the charts in blockchain and crypto technology, scoring an impressive 85.4 in an Apex report. The nation houses over 2,400 blockchain-related job opportunities and 81 crypto exchanges, underscoring its robust workforce and infrastructure focus.

Top 10 Blockchain Nations in 2024. Source: ApeX.

The study assessed various countries based on a composite index considering factors like blockchain patents, job growth, and the number of cryptocurrency exchanges.

"Spearheading as a global leader in the crypto realm, Singapore owes its success to progressive regulatory frameworks, pro-innovation policies, and unwavering government support for blockchain technology. The clear legal directives for digital assets, a favorable tax structure, and active engagement with industry stakeholders create an environment ripe for crypto businesses and blockchain innovations," stated Svanevik.

A Balanced Regulatory Paradigm

A pivotal element in Singapore's success story is its balanced regulatory framework, emphasizing consumer protection without hindering innovation.

In 2019, Singapore introduced the Payment Services Act (PSA), a comprehensive licensing system for Digital Payment Token (DPT) service providers.

Encompassing crypto exchanges and wallet providers, the bill fortifies consumer protection, combats terrorism financing, and enhances cybersecurity measures within the financial sector.

"This risk-adjusted framework drives tech advancement while upholding financial security and integrity," Svanevik conveyed to BeInCrypto.

These regulatory actions establish uniform guidelines nationwide, streamlining crypto adoption for both investors and consumers.

Driving Innovation with Consumer Security

Singapore's earnest focus on protecting users against security risks and fraudulent acts has fostered a reputation for prioritizing consumer protection within the crypto sector.

For crypto businesses to operate in the nation, compliance with consumer protection laws is compulsory.

"Safeguarding consumer interests within the crypto sphere through stringent regulations is a top priority for Singapore. MAS mandates DPT service providers to implement robust security protocols and conduct comprehensive customer due diligence. Collaborating with MAS, the Singapore Police Force actively tracks and addresses fraudulent activities involving digital assets," elaborated Svanevik.

In November 2023, MAS announced plans to tighten regulations for DPT providers, necessitating adaptations in operational practices to adhere to the new regulatory framework.

The implementation of these regulations is rolled out in two phases, with the initial phase focusing on customer asset protection, disclosures, and risk management controls already in effect as of October 2024.

The subsequent phase is scheduled for six months later, commencing on June 19, 2025, requiring crypto firms to conduct risk awareness assessments for retail customers to bolster informed decision-making.

Furthermore, these regulations prohibit licensed firms from offering incentives to lure retail customers and restrict leveraging or using derivatives contracts related to cryptocurrencies as underlying assets with retail investors due to the market's inherent volatility. Risk awareness evaluations are preconditions for continued service provision to existing retail customers.

A Tax System Favorable to Crypto Ventures

Singapore's flexible tax regime presents significant advantages to crypto investors and businesses, setting it apart in the global cryptosphere.

A distinctive feature of Singapore's tax code is the absence of a capital gains tax, contrasting with numerous nations where profits from cryptocurrency sales are subject to such taxation, impacting investor returns significantly.

Singapore segregates personal investments from business operations, exempting personal cryptocurrency investments from the capital gains tax while maintaining taxation on business activities associated with crypto trading.

Additionally, digital payment tokens like Bitcoin and Ethereum evade the standard 8% Goods and Services Tax (GST) in transactions, lightening the tax load on cryptocurrency dealings and positioning Singapore as an attractive destination for digital asset businesses encompassing exchanges, wallet providers, and ancillary companies.

Singapore's corporate tax rate of 17% bolsters the growth of crypto startups and blockchain enterprises, solidifying its standing as a global hub of innovation.

For comparison, the United States' corporate tax rate is 21%, Estonia stands at 22%, and South Korea at 27.5%.

DBS Bank Pioneering Digital Asset Adoption

DBS Bank of Singapore has been pivotal in establishing a national platform for trading digital tokens through its DBS Digital Exchange (DDEx), initiating institutional and accredited investors to cryptocurrency and security token trading.

In September 2022, DBS expanded access to DDEx for 100,000 premier clientele, enabling accredited clients with a minimum of $246,000 in investable assets to engage in buying, selling, and trading cryptocurrencies.

Two years later, DBS diversified its product range to include crypto options trading and structured notes for sophisticated investors, granting eligible clients access to digital assets while mitigating market volatilities and potentially earning yield.

"DBS Bank's proactive involvement not only bolsters market credibility but also positions Singapore as a model in harmonizing traditional finance with burgeoning blockchain technologies. This alignment of institutional finance with digital innovations sets a precedent for global banks' responsible adoption and scaling of blockchain solutions," asserted Svanevik.

The bank further introduced DBS Token Services, melding blockchain solutions with core banking operations to streamline digital asset management, interlinking the bank's functions with an EVM-compatible blockchain to enable tokenization and smart contracts.

Nansen disclosed in a prior post that DBS bank was purportedly the owner of an ETH whale wallet containing 173,753 Ether valued at $650 million at that time, signifying growing institutional confidence in digital assets, marking a pivotal shift where traditional financial institutions are steadily integrating crypto into their foundational strategies.

Ongoing Progressions in Blockchain Initiatives

Singapore continues to spearhead blockchain integration through a series of key initiatives in recent years.

In 2022, Singapore ventured into the decentralized finance (DeFi) domain by hosting a live test of digital asset trading across liquidity pools. This live transaction, involving tokenized deposits, marked the first industry pilot under MAS's Project Guardian.

"Project Guardian, led by MAS, delves into asset tokenization to enhance financial market efficiency through collaborations with industry leaders," Svanevik noted.

Recently, MAS announced the inception of five new pilot programs exploring asset tokenization under Project Guardian to scale tokenized markets effectively.

"These ongoing industry pilots foster asset tokenization advancements across financial sectors, reinforcing Singapore's position as a pacesetter in blockchain innovation," Svanevik emphasized.

These pilot programs intend to analyze the potential of asset tokenization, aiming to bolster integration across the entire capital markets value chain, encompassing listing, distribution, trading, settlement, and asset servicing activities.

This week, the collaboration between the National University of Singapore (NUS), Northern Trust, and UOB unveiled an initiative pioneering the tokenization of green bond credentials using blockchain technology to enhance transparency, data integrity, and investor confidence in sustainable investing practices.

The initiative marks a progressive stride for NUS, positioning it as the first university in Singapore leveraging blockchain for ESG reporting, aiming to augment transparency, data integrity, and investor trust in sustainable investments.

Collaborative Efforts Between Public and Private Entities

Singapore actively propels blockchain adoption across public and private domains, engaging in strategic partnerships and initiatives, as disclosed by Svanevik.

In late 2020, Enterprise Singapore (ESG), Infocomm Media Development Authority (IMDA), and the National Research Foundation (NRF) launched the $12 million Singapore Blockchain Innovation Programme (SBIP). This industry-led initiative aimed to involve nearly 75 companies in developing 17 blockchain-related projects over the next three years, with an initial focus on trade, logistics, and supply chain sectors.

"The Singapore Blockchain Innovation Programme (SBIP) fosters synergies among government agencies, academic institutions, and private enterprises to enhance blockchain capabilities," underscored Svanevik.

During the same year, MAS concluded Project Ubin, a five-stage collaboration with various financial institutions and industry players to explore blockchain and Distributed Ledger Technology (DLT) applications in payment and securities settlements.

In 2023, MAS introduced the Orchid Blueprint, a strategic framework for establishing a secure and efficient digital money infrastructure. Drawing insights from past industry trials, this blueprint advocates for collaboration between central banks and the private sector to promote the safe and innovative use of digital money in Singapore.

"Singapore's proactive regulatory interventions, innovative pathways, and collaborative endeavors position it as a global front-runner in the crypto and blockchain landscape," Svanevik concluded.

As Singapore invests in infrastructure, ensures regulatory clarity, and extends government backing, the nation is poised to maintain its leadership position in global crypto and blockchain innovation.

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