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BNN Bloomberg: Singapore’s Wary Crypto Embrace Leaves Richest Mogul in the Cold

BNN Bloomberg: Singapore’s Wary Crypto Embrace Leaves Richest Mogul in the Cold

Additional comments to what I have been quoted on BNN Bloomberg:

Singapore is all rounded; good pool of talents, a strong finance ecosystem, strategic location. Singapore is one of the earlier countries that embrace crypto.

If projects are unsure, they should find out more from the regulators and not hearsay or rumours. The regulators need to correct some of these misinformation on the ground.

Get the right information to make the right decision.

Singapore’s Wary Crypto Embrace Leaves Richest Mogul in the Cold

(Bloomberg) — Binance Holdings Ltd. Chief Executive Officer Changpeng Zhao was putting on a brave face.

An affiliate of the world’s largest cryptocurrency exchange had just withdrawn its application to run a bourse in Singapore. Zhao, the richest person in cryptocurrency with a fortune of about $90 billion, took to Twitter to say the affiliate’s investment in another exchange — one that was regulated — made the application “somewhat redundant.”

As it turns out, the other exchange has a license to trade some things — such as shares in private companies and tokenized assets — but not cryptocurrencies. More importantly, the real reason for the withdrawal was that Binance’s affiliate didn’t meet Singapore’s criteria for protecting against money laundering and terrorist financing, a person familiar with the matter said after it happened last month. Binance denies this, saying it pulled the application on strategic and commercial grounds.

Binance is just the biggest player among scores of companies welcomed and then disillusioned by Singapore’s two-pronged approach to crypto policy. On one hand, the city-state embraces the technologies of cryptocurrency and has launched a framework for regulating the industry when other countries such as China have opted for outright bans. On the other, it doesn’t want its people getting burned by speculation, is wary of the criminal risks and is extremely picky about who it lets in.

“There is a very clear line drawn in the sand,” said Lena Ng, a partner at Clifford Chance who advises cryptocurrency players in Singapore and internationally.

The cryptocurrency industry is attracting the attention of regulators around the world, with U.S. Securities and Exchange Commission Chair Gary Gensler labeling it the “Wild West” and saying it needs more oversight. The Singapore example shows the regulatory process won’t always be easy for the companies involved, even as states express openness to the concepts and technologies.

Ravi Menon, the managing director of the Monetary Authority of Singapore, the central bank and financial regulator, laid out Singapore’s approach in an interview with Bloomberg in October. The city-state sees promise in areas such as decentralization, smart contracts and encryption, and wants to be well-positioned if they become integral to our economies, he said. But there are also “serious risks,” he said, giving the examples of money laundering and terrorist financing.

“It could lead to nowhere, or it could lead to a lot of risk and turmoil, or it could lead to a very good outcome for the economy and the society,” Menon said of the crypto phenomenon. “We have to look at it in terms of scenarios, and prepare ourselves for any of those outcomes.”

Singapore’s Payment Services Act came into effect in January 2020, providing a framework for regulating areas from trading Bitcoin to using tokens for payments. Under the law, MAS hands out so called digital payment token licenses to crypto companies that make it through the application process.

The act’s introduction helped accelerate an inflow of crypto players into the Southeast Asian city.

Crypto.com, the world’s fourth-largest cryptocurrency bourse, relocated its headquarters from Hong Kong in 2021 and is seeking a license. An affiliate of Huobi Group, which operated China’s biggest crypto exchange before last year’s blanket ban, is also applying, and its co-founder Du Jun has spent the last two years in Singapore. Binance’s Zhao, for that matter, had also been based in the city-state for the past two years.

All told, some 170 firms applied, including Coinbase Global Inc., the exchange that went public in the U.S. last year in a landmark moment for the crypto industry. Gemini Trust, the bourse founded by Tyler and Cameron Winklevoss, is also among the applicants. Companies that have put in an application are allowed to operate in the city under a grace period until the regulator says otherwise or they drop out.

But about 100 applicants have already withdrawn or been rejected. Most failed to meet Singapore’s criteria for preventing illicit flows of funds, a person familiar with the matter has said.

In fact, only four are known to have received their licenses, including Independent Reserve, an Australian cryptocurrency exchange, and the brokerage unit of DBS Group Holdings Ltd., Singapore’s largest bank. One other company, local startup Coinhako, said it had received in-principle approval.

“We don’t need 160 of them to set up shop here,” Menon said in the October interview. “Half of them can do so, but with very high standards.”

Singapore is taking a middle ground between the extremes of China, which banned all crypto transactions in September and vowed to stop illegal crypto mining, and El Salvador, which adopted Bitcoin as legal tender that same month.

It’s an approach that has similarities with other Asian financial centers.

Hong Kong, Singapore’s main rival as the region’s leading financial hub, uses a so-called “opt-in” regulatory regime for crypto exchanges, meaning they can apply to be regulated. It has approved one firm. The authorities are in the process of passing laws to enable a new licensing regime.

Japan had recognized 15 companies as cryptocurrency exchange operators as early as 2017, making it one of the pioneers of crypto regulation. As of December, it had given licenses to 30 such firms.

South Korea had accepted registrations by 24 crypto-trading exchanges to operate in the country as of Dec. 23. Only four of them are allowed to provide trading services in Korean won.

Singapore has advantages for becoming a crypto hub in its low-tax regime and lack of a levy on capital gains, according to Ulisse Dellorto, the Asia-Pacific head of blockchain analytics firm Chainalysis. The city-state also has an edge in ease of doing business, robust infrastructure and connectivity, and the fact that it’s already a financial center, said Gerald Goh, co-founder and Singapore CEO of Sygnum, which runs a digital-asset bank in Switzerland and an asset manager in the Asian city.

Some 350 firms focusing on blockchain and cryptocurrency already operate on the island, according to Chia Hock Lai, co-chairman of the Blockchain Association Singapore, which promotes blockchain technology. That translates into about 3,500 jobs, based on a median staff size of 10, he said.

But the case of Binance, which generated at least $20 billion of revenue last year according to a Bloomberg analysis, suggests expanding at all costs isn’t necessarily the priority.

There were already signs the writing was on the wall for Zhao’s firm in September, when Singapore’s regulator added Binance.com, the group’s main platform, to its Investor Alert List of unregulated entities that may have been wrongly perceived as licensed or regulated by MAS. It told Binance Holdings to stop offering services regulated in the city-state, allowing only the Singapore entity to serve local residents.

Then in December, almost two years after it applied, Binance withdrew from the process.

“This certainly won’t damage Singapore’s reputation as a crypto hub,” said Neal Cross, a financial-technology entrepreneur and former chief innovation officer of the bank DBS. “In fairness, it may enhance it. Crypto is still nascent and has a long way to go before it becomes a major player in our wealth portfolios, but to make that happen, it needs to happen in a place that is firm but fair.”

A spokesperson for Binance said it’s continuing to work closely with partners and government agencies in Singapore to support the growth of blockchain and cryptocurrency initiatives in the country.

World’s Biggest Crypto Fortune Began With a Friendly Poker Game

Cross said openness to crypto will yield benefits because blockchain and decentralized finance are likely to make up a large part of the financial services industry in the future. Asked about potential downsides, he said there are two.

“One is the failure of such exchanges” and “the losses incurred by mom and pop investors as these aren’t government-guaranteed,” he said. “Secondly, crypto is notoriously hard to track and hence can open up new pathways to money laundering, but I feel MAS are on top of this with their current regulation.”

MAS’s Menon has repeatedly said Singapore doesn’t want its people speculating on Bitcoin and other volatile cryptocurrencies.

“MAS frowns on cryptocurrencies or tokens as an investment asset for retail investors,” he said in a December speech. Cryptocurrency prices “are not anchored on any economic fundamentals and are subject to sharp speculative swings. Investors in these tokens are at risk of suffering significant losses.”

Bitcoin, the largest cryptocurrency, more than doubled from the start of 2021 through a high in November before tumbling for the rest of the year. In 2018, it plunged 74%.

Singapore’s desire to protect its public from crypto trading has echoes in its policy for its two casinos, which have been a big economic success but came with concerns its people would be affected by gambling. In response, the government charges a S$150 ($111) daily entry fee for citizens and permanent residents, while foreigners get in for free.

Singapore Warns Public Against Crypto as World Warms to Bitcoin

To be sure, not everyone is positive about Singapore’s crypto strategy.

“When Binance left, it became a statement that Singapore doesn’t welcome the big boys,” said Anndy Lian, the chairman of cryptocurrency bourse BigONE Exchange. “Many people are going for Dubai, because they see Singapore as not welcoming, and don’t know the real reasons behind that.”

Binance itself has turned to the Middle East, signing a cooperation agreement with the Dubai World Trade Centre Authority last month on the emirate’s planned virtual asset ecosystem. It also got in-principle approval from Bahrain’s central bank to be a crypto-asset service provider in the kingdom. And it appointed Richard Teng, a high-profile hire who joined Binance’s Singapore affiliate as its CEO in August, as the global entity’s head of the Middle East and North Africa.

Meanwhile, back in Singapore, a billboard for Crypto.com shouted its message in bold at a busy crossing on the Orchard Road shopping belt. “Fortune favors the brave,” it declared.

That may be true, or it may also favor the cautious. For Huobi Singapore CEO Edward Chen, the key is to get the mix just right.

“It is important to find the right balance between regulation and mitigating risks while still maintaining a competitive edge,” Chen said.

©2022 Bloomberg L.P.

 

 

Original Source: https://www.bnnbloomberg.ca/singapore-s-wary-crypto-embrace-leaves-richest-mogul-in-the-cold-1.1706056

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

India Should Embrace Decentralization for the Benefit of All Its Citizens

India Should Embrace Decentralization for the Benefit of All Its Citizens

The government of India’s plans to ban cryptocurrency are the actions of a reforming administration which is struggling to understand the forces of cryptocurrency decentralization and decentralized finance (DeFi). The proposed ban by the Indian government against private cryptocurrency also needs to be put in context of the real-world politics and economic concerns driving the legislative agenda.

Back in 2016 the Prime Minister, Narendra Modi, declared that 1,000- and 500-rupee notes would no longer be valid. This meant that around 86% of currency in circulation was no longer legal tender. And in a similar fashion to today’s proposed crypto move, its set to target tax evasion, with data from 2013 showing only 1% of India’s then 1.28 billion inhabitants paid any tax. Then in 2018 the Reserve Bank of India sent shock waves through the crypto community when it announced that financial institutions were to stop doing business with retail and business crypto users. While in 2020 the Supreme Court overturned this order as in breach of the constitution’s safeguard to free trade, it’s clear the Indian Government is still very much concerned about the welfare of its citizens, particularly young people, by take control of cryptocurrencies.

The challenge is that at a time when India is seeking to boost its attractiveness for business innovation and entrepreneurship that one of the most dynamic sectors is the rapidly growing DeFi sector. Compared to neighboring economies such as Pakistan and Vietnam, DeFi in India is not only much bigger but also a more mature sector. With India’s crypto adoption ranking second in the world in the recent 2021 Global Crypto Adoption Index from Chainalysis, the report confirmed that large institutional-sized transfers above $10 million worth of cryptocurrency represent 42% of transactions sent from India-based addresses, versus 28% for Pakistan and 29% for Vietnam, with the highest rate of crypto adoption in the world. The argument from the crypto industry is that what is needed is better regulation and education to support the estimated 15-20 million crypto investors in India, who are benefiting from using cryptocurrency to send and receive money around the world, this includes young people earning money from playing blockchain-based games such as Axie Infinity.

The continued attractiveness of cryptocurrency, despite policy shifts in the last few years, derives in part from the reality of the current equity market for Indian investors. Compared to the ease of holding crypto, an equity investment is still much more bureaucratic, with a process that can reportedly take up to four days to process from start to finish. Indeed, it’s estimated that there are as many as four times more crypto investors in India compared to equity investors, suggesting that the government’s agenda would benefit from including equity market reform.

A third challenge for the Indian Government tackling cryptocurrency is the fact that an increasing numbers of IT professionals and freelancers from the fintech through to IT sector now get paid in crypto. Indeed, these crypto savvy professionals have a good selection of decentralized exchanges for their transactions, thanks to the growth of the DeFi sector. While it’s understandable that the Government wishes to roll out their own central bank digital currency (CBDC) to facilitate payments, it needs to therefore consider the needs of India’s growing crypto and blockchain business community.

With the crypto industry in India currently seeing over 100% growth month-on-month growth, these are some of the complex challenges facing the government more so than is suggested by simplistic headline on India banning crypto. As we’ve seen recently with the all too predictable ban on cryptocurrency in China, leading to a mass exodus of the highly profitable crypto mining industry to the US, Russia and Kazakhstan, there are important economic issues to consider for India in the context of a global economy, in addition longstanding concerns about tax evasion and cryptocurrency volatility.

Despite the gradual softening of the Indian government’s attitude to crypto currency since the 2018 ban the Indian Government is reminiscent of Chinese state policy, seeing the advantages of a central bank currency, and the benefits of blockchain based innovation, but without wider decentralization. So, the question remains to what degree will the Indian Government be able to seize the opportunities provided by decentralized technologies and DeFi, faced with conflicting pressures from a global economy and crypto entrepreneurs on the one hand, and a central bank looking to take control over an unregulated cash economy on the other?

For further confirmation of the power of decentralized crypto sector in a global economy still struggling to recover from COVID-19, you need look no further than the US which recently passed the much-awaited $1.2 trillion infrastructure bill into law. In crypto circles the hype around the bill’s positive features was overshadowed by its poorly worded and ambiguous sections on tax reporting provisions that apply to digital assets. Despite intense lobbying before the bill was passed, the imperatives of the US Treasury Department won the day. Now it’s left to new amendments to the law to sort out the mess. In India where policy is guided by the best of intentions to help solve the issue of a ‘volatile’ cryptocurrency market, there are also risks in undermining a successful crypto sector that is estimated to directly and indirectly employ approximately 50,000 people.

The Indian Government is at a crossroads in terms of the development of decentralized finance and the blockchain sector. It can learn from the impact of the ban in China, and the poorly worded legislation in the US, for a country competing in a global economy. There are more pragmatic approaches to crypto in smaller territories and countries such as Singapore and Switzerland worth considering. Singapore is trying to build its own crypto ecosystem by embracing crypto exchanges and startups, and I think that is a model that India could adapt to fit its specific policy needs. After all, even for Singapore it’s still a tricky balancing act to achieve, to embrace crypto, and regulate the crypto sector to protect investors and the public at large, to be a leading hub for cryptocurrencies in Southeast Asia and globally.

It remains to be seen whether the Indian Government’s approach will work in the long run, seeking to ban cryptocurrency for payments (hence the use of the term “private cryptocurrency” in the proposed legislation), while at the same time allowing for digital assets to be regulated by the Securities and Exchange Board of India. This cryptocurrency ban is at odds with the decentralized economy where crypto payments and assets go hand in hand. Ripple in the US recently brought out its vision of public and private sector working together, in a regulatory framework that is fit for purpose. In India the crypto sector also needs to recognize the need for regulation, to unlock the potential of both crypto and blockchain to power the economy, while also protecting the estimated 15 to 20 million retailer investors, and the market as a whole.

There is certainly room for optimism regarding the Indian Government’s plans for crypto regulation, drawing on the lessons from the US and China, and the successes of crypto ecosystems in Singapore and Switzerland. But this learning curve over the last year, set against the desire for tax reform in the last five years, needs to start sooner rather than later. By the nature of a decentralized economy its not one where assets and crypto currency can be easily divided. Bitcoin is largely seen as a store of value, a digital asset to rival gold. But at the same time in El Salvador its now legal tender for payments from small to large businesses, for both citizens and government. India needs to clamp down on tax evasion, but it also needs to prioritize growing an economy for all its citizens.

It’s also true that with about 190 million unbanked adults, India is second only to China for the number of people without bank accounts or a stake in the formal financial sector, according to the World Bank. Government initiatives have worked best when in collaboration with the private sector have taken on a more decentralized approach, providing services without the need for banking and service fees. In other words, there’s already a model for adoption of decentralized crypto solutions for the unbanked. With the political motivation to see cryptocurrencies as tools to help India compete in the post-pandemic global economy, it could also help lift millions of its citizens out of poverty. Let’s hope therefore that these insights help guide the final form of the new regulation, and decentralization plays its part in the heart of the world’s largest democracy. #anndyliansays

 

Original Source: https://www.securities.io/india-should-embrace-decentralization-for-the-benefit-of-all-its-citizens/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Should Wealth Managers Embrace Digital Assets? Anndy Lian speaks with wealth veterans from Nickel Digital and Bordier & Cie

Should Wealth Managers Embrace Digital Assets? Anndy Lian speaks with wealth veterans from Nickel Digital and Bordier & Cie

2020 was the year Crypto went Institutional and with some of the large institutions investing into Crypto including Private Banks, Asset Managers and wealth managers, we will discuss the fundamental drivers behind this market to help wealth managers understand the role of digital assets in portfolio construction. We will examine where this market is going, what are the opportunities and associated risks.

Questions covered:
– Define our terms: How best to understand what Bitcoin is?
– Why does the market exist, what’s driving it and how?
– Why wealth management clients should consider digital assets and how can they be part of portfolios?
– What challenges exist for private bankers and wealth managers in handling this business, such as around custody, settlement, regulatory controls?

Webinar Objectives:
– To clearly define and explain Crypto Assets and achieve a clear understanding of this asset class
– Discuss the benefits it can give a client portfolio, while assessing the risks and trying to reduce these
– Offer a discussion forum for questions related to this asset class

This webinar is held on 9th March 2021, organised by WealthBriefing and Nickel Digital. Speakers include Anatoly Crachilov, Founding Partner & CEO, Nickel Digital; Anndy Lian, Intergovernmental Blockchain Advisor; and Evrard Bordier, CEO and Managing Partner Bordier & Cie, Singapore.

“Bitcoin’s set cap makes it more reliable than other scarce assets. It will eventually function as a store of value and as a means of payment, even though that might not be the case today.

At this point, the inherent deflationary nature of Bitcoin leads to hoarding and speculation, driving price volatility. But once Bitcoin has finished accumulating value, when it has become a large and liquid asset, it will be much more stable than it is today. This trend is already visible.” Anndy Lian commented during the event.

Crypto Assets are a relatively new asset class very different from traditional asset classes but one that can add real value as an uncorrelated source of returns. Nickel Digital has just recently finished an analysis reflecting an impact of 1%-3% allocation to Bitcoin within a standard 60% equity / 40% fixed income portfolio. The findings (over a statistically significant 8-year period) indicate that such a controlled allocation not only boosts performance of the underlying portfolio, but also improves Sharpe ratio, thus resulting in a more efficient portfolio construction.

Speakers:

Anatoly Crachilov
Founding Partner & CEO, Nickel Digital
Anatoly is an investment professional with 25 years of experience in investment management and private equity. Prior to co-founding Nickel Digital in 2019, Anatoly was for seven years with investment management divisions of Goldman Sachs and JPMorgan dealing with asset allocation and portfolio construction.

Anatoly earned an MA degree in International Business from the University of National and World Economy in Sofia and Executive MBA degree from the University of Oxford in 2009. He returned to Oxford in 2018 to be among the first cohort of global investment professionals to complete Oxford Blockchain Strategy Programme, which ultimately led to co-founding of Nickel Digital.

Anndy Lian
Intergovernmental Blockchain Advisor
Anndy Lian is an all-rounded business strategist with more than 15 years of experience in Asia. He has provided advisory across a variety of industries for local, international & public listed companies. Anndy played a pivotal role in not-for-profit and quasi government linked organizations. An avid supporter for incubating start-ups, Anndy has investments in a few health-related companies. He believes that what he is doing for blockchain technology currently will revolutionise and redefine traditional businesses.

Evrard Bordier
CEO and Managing Partner Bordier & Cie, Singapore
Evrard Bordier is chief executive officer of Bordier & Cie, Singapore. In addition, he serves as managing partner of Bordier & Cie Group since 2011, and is president of the board of Bordier Bank (TCI) since 2000. Prior to his current role in Singapore, he was managing director of Bordier International in London for 10 years.

Evrard has been in the financial industry for over 25 years, during which he has garnered extensive international experience holding diverse positions in Singapore, Hong Kong, Geneva, Zurich, and London. Between 1997 and 2000, he served as chief of staff for the Financial Planning and Wealth Management Business Division of UBS in Zurich, overseeing all of its asset management business units across the world. Prior to that, he was a client adviser in the private banking department of Swiss Bank Corporation in Singapore where he covered the markets of Indonesia and Taiwan. He first moved to Asia in 1994 and joined Nomura International in Hong Kong as a broker. Evrard began his professional career as a lawyer at Lenz & Staehelin in Geneva, specialising in the banking and finance practice. Evrard is a direct descendant and fifth generation of the bank’s founding family. He is a member of the Society of Trust and Estate Practitioners, the Turks and Caicos Islands Bankers Association, the Financial Industry Association, and the Swiss Financial Planner Organisation.

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j