Why Singapore Outpaces Hong Kong In Attracting Crypto Operators

Why Singapore Outpaces Hong Kong In Attracting Crypto Operators

Singapore has emerged as a beacon of stability and innovation. Over the past few years, the city-state has positioned itself as a global leader in digital assets and blockchain technology, attracting some of the biggest names in the industry. This success is no accident. It is the result of a carefully designed regulatory framework by the Monetary Authority of Singapore (MAS), which has managed to strike a delicate balance between fostering innovation and ensuring investor protection.

With over 200 licensed payment institutions (MPIs) and a growing number of digital payment token (DPT) service applications, Singapore has become a prime destination for crypto operators looking to expand in Asia. In 2024 alone, MAS issued 13 Major Payment Institution (MPI) licenses for crypto exchanges, more than doubling the number issued in 2023. This surge in licensing reflects Singapore’s growing dominance in the cryptocurrency space and its ability to attract major players like Okx, Upbit and Bitgo.

However, Singapore’s success is not just about the numbers. It is about the city-state’s ability to create a regulatory environment that inspires trust, encourages innovation, and mitigates risks. I want to explore Singapore’s approach to cryptocurrency regulation, examines its competitive edge over Hong Kong, and considers the broader implications of its strategy for the global crypto industry.

Singapore’s Regulatory Framework: A Global Standard

Singapore’s success in the cryptocurrency space is built on the foundation of the Payment Services Act (PS Act), which came into effect in January 2020. This legislation introduced an activity-based licensing framework for payment services, including digital payment token (DPT) services. Unlike traditional regulatory models that impose blanket rules on entire industries, the PS Act tailors its requirements to the specific activities of each service provider. This nuanced approach allows MAS to address risks such as money laundering, terrorist financing, and market volatility without stifling innovation.

MAS Managing Director Chia Der Jiun has emphasized the importance of this balanced approach, describing the PS Act as a framework that “applies appropriate risk-mitigating regulations for the specific payment service, while allowing latitude for growth and innovation.” This dual focus on risk management and innovation has been instrumental in attracting a diverse range of crypto operators to Singapore. It sends a clear message to the industry: Singapore is open for business, but only for those who are willing to meet its high standards.

The results are undeniable. Since the PS Act’s implementation, the number of licensed MPIs in Singapore has grown as mentioned above. This rapid growth is a testament to the confidence that crypto operators have in Singapore’s regulatory environment. It also reflects MAS’s ability to adapt its rules to address emerging risks, as evidenced by the expansion of the PS Act’s scope in April 2024.

Learning from the Past: Turning Challenges into Strengths

Singapore’s regulatory approach has been shaped by the lessons of the past. The crypto market’s volatility in 2021 and the collapse of several high-profile firms during the crypto winter of 2022 exposed significant vulnerabilities in the ecosystem. These events served as a wake-up call for regulators around the world, highlighting the need for stronger safeguards to protect investors and ensure market stability.

MAS responded to these challenges with characteristic pragmatism. Instead of retreating from the crypto space, it doubled down on its efforts to create a robust regulatory framework. The expanded scope of the PS Act in 2024 introduced stricter requirements for DPT service providers, including enhanced risk management and compliance measures. These changes were not merely reactive; they were part of a broader strategy to future-proof Singapore’s regulatory framework against the rapidly evolving risks of the digital asset landscape.

This adaptability has been a key factor in Singapore’s success. By continuously refining its rules, MAS has been able to address new risks as they arise while maintaining a supportive environment for innovation. This dynamic approach has not only enhanced investor confidence but has also encouraged more crypto operators to set up shop in Singapore. It is a clear example of how regulation, when done right, can be a catalyst for growth rather than a barrier to it.

Why Singapore Outpaces Hong Kong in Crypto Licensing

While Singapore has been issuing crypto licenses at an unprecedented rate, Hong Kong has taken a more cautious approach. As of 2024, Hong Kong has only seven fully licensed crypto exchanges, a stark contrast to Singapore’s 13 MPI licenses issued in the same year. This disparity raises an important question: Why has Singapore been more successful than Hong Kong in attracting crypto operators?

One key factor is regulatory clarity. Singapore’s PS Act provides a clear and consistent framework for crypto operators, giving them the confidence to invest in the city-state. In contrast, Hong Kong’s regulatory environment has been criticized for its lack of clarity and frequent changes. While Hong Kong introduced a licensing regime for virtual asset service providers (VASPs) in 2023, the implementation process has been slow and cumbersome, deterring some operators.

Another factor is Singapore’s proactive approach to risk management. By addressing risks such as money laundering and market volatility upfront, MAS has created a safer and more stable environment for investors and operators alike. Hong Kong, on the other hand, has been slower to address these risks, which has undermined investor confidence. Singapore’s support for innovation has also given it a competitive edge. The city-state’s regulatory framework is designed to facilitate innovation while mitigating risks, creating a fertile ground for startups and established players alike. In contrast, Hong Kong’s regulatory environment has been perceived as more restrictive, limiting its appeal to innovative companies.

Finally, geopolitical factors cannot be ignored. Singapore’s political stability and business-friendly environment have made it a preferred destination for global crypto operators. While Hong Kong remains a major financial hub, its political situation and closer alignment with mainland China have raised concerns among some crypto operators, prompting them to look elsewhere.

Hong Kong’s Strategy: A Work in Progress

Despite its slower start, Hong Kong is making efforts to catch up with Singapore in the crypto space. The introduction of the VASP licensing regime in 2023 marked a significant step forward, and the Hong Kong Monetary Authority (HKMA) has been working to provide more clarity and support for crypto businesses. However, the city still faces several challenges.

One of the biggest hurdles is the perception that Hong Kong’s regulatory environment is overly restrictive. The VASP regime, for example, requires crypto exchanges to comply with stringent anti-money laundering (AML) and counter-terrorist financing (CTF) requirements, which can be burdensome for smaller operators. Additionally, the slow pace of licensing has frustrated some applicants, leading them to explore opportunities in other jurisdictions.

Another challenge is the competition from mainland China. While Hong Kong has positioned itself as a gateway to China, the mainland’s strict ban on cryptocurrency trading has limited the city’s ability to attract global crypto operators. This has put Hong Kong at a disadvantage compared to Singapore, which has no such restrictions.

That said, Hong Kong has some unique advantages. Its proximity to mainland China and its status as a global financial hub make it an attractive destination for companies looking to tap into the Chinese market. Additionally, the HKMA’s efforts to develop a central bank digital currency (CBDC) and promote blockchain innovation could help the city carve out a niche in the digital asset space.

The Broader Implications: A Win for the Global Crypto Industry

The competition between Singapore and Hong Kong is not just a regional story; it has broader implications for the global crypto industry. As these two financial hubs refine their regulatory frameworks and attract new players, they are helping to drive the growth and maturation of the digital asset ecosystem. Their efforts are setting benchmarks for other jurisdictions, demonstrating that it is possible to balance innovation with investor protection.

For Singapore, the challenge will be to maintain its momentum while addressing new risks and ensuring that its regulatory framework remains fit for purpose. The city-state’s success has attracted a growing number of crypto operators, but this also increases the potential for bad actors to exploit the system. MAS will need to remain vigilant and proactive in its approach to regulation.

For Hong Kong, the challenge will be to overcome its slow start and build a more attractive regulatory environment for crypto businesses. This will require greater clarity and consistency in its rules, as well as a more streamlined licensing process. Additionally, Hong Kong will need to leverage its unique advantages, such as its proximity to China and its status as a global financial hub, to differentiate itself from Singapore.

Conclusion: Singapore’s Winning Formula

Singapore’s rise as a global cryptocurrency hub is a testament to the power of thoughtful and proactive regulation. By balancing risk management with innovation, MAS has created an environment that attracts a diverse range of crypto operators while protecting investors and fostering growth. This approach has not only positioned Singapore as a leader in the digital asset space but has also set a benchmark for other jurisdictions to follow.

While Hong Kong has made strides in recent years, it still has a long way to go to catch up with Singapore. The city’s slow pace of licensing and restrictive regulatory environment have limited its appeal to crypto operators, giving Singapore a significant edge. However, with the right reforms and a renewed focus on innovation, Hong Kong has the potential to become a major player in the crypto space.

Ultimately, the competition between Singapore and Hong Kong is a win for the global crypto industry. As these two financial hubs continue to push the boundaries of what is possible in the digital asset space, they are helping to shape the future of finance. For now, however, Singapore remains the undisputed leader, setting the standard for what a crypto-friendly jurisdiction can achieve.

 

 

Source: https://www.benzinga.com/markets/cryptocurrency/25/04/44695782/why-singapore-outpaces-hong-kong-in-attracting-crypto-operators

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”.

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Top KOL Influencer Singapore Ngành Crypto Uy Tín Nhất 2024

Top KOL Influencer Singapore Ngành Crypto Uy Tín Nhất 2024
Trong thị trường tiền điện tử đang phát triển mạnh mẽ, các KOL Influencer Singapore Ngành Crypto đã trở thành những nhân vật có tầm ảnh hưởng đáng kể trong việc định hình xu hướng, chiến lược và nhận thức của cộng đồng. Dưới đây SEcafe tổng hợp danh sách các KOL Crypto hàng đầu ở Singapore mà bạn không nên bỏ qua.

KOL Influencer Singapore Ngành Crypto – Arthur Cheong

Arthur Cheong là một trong những nhà sáng lập DeFiance Capital, một quỹ đầu tư tập trung vào các dự án tài chính phi tập trung (DeFi). Anh thường xuyên chia sẻ các phân tích sâu sắc về thị trường crypto trên Twitter, giúp cộng đồng hiểu rõ hơn về tiềm năng và các rủi ro của thị trường này.

KOL Influencer Singapore Ngành Crypto – Anndy Lian

Anndy Lian là một chuyên gia tài chính với nhiều kinh nghiệm trong lĩnh vực blockchain và crypto. Anh là cố vấn chiến lược cho nhiều dự án lớn, thường xuyên tham gia các sự kiện quốc tế và là một nhân vật nổi bật trong cộng đồng crypto tại Singapore.

KOL Influencer Singapore Ngành Crypto – Bobby Ong

Bobby Ong là nhà đồng sáng lập CoinGecko, một trong những nền tảng theo dõi thị trường crypto lớn nhất thế giới. Anh thường xuyên chia sẻ về những xu hướng mới trong lĩnh vực blockchain và tài chính phi tập trung, cũng như cách mà CoinGecko giúp người dùng tiếp cận thông tin chính xác về thị trường.

KOL Influencer Singapore Ngành Crypto – Kelvin Koh

Kelvin Koh là một đối tác sáng lập tại Spartan Capital, một công ty đầu tư blockchain hàng đầu ở Singapore. Anh thường xuyên cung cấp các phân tích chi tiết về thị trường crypto, từ những xu hướng mới nổi đến các dự án có tiềm năng phát triển trong tương lai.

KOL Influencer Singapore Ngành Crypto – Darius Sit

Darius Sit là nhà đồng sáng lập QCP Capital, một công ty giao dịch và đầu tư crypto nổi tiếng. Anh là một trong những chuyên gia hàng đầu trong lĩnh vực giao dịch tài sản số và thường xuyên chia sẻ các bài viết phân tích thị trường trên mạng xã hội và các kênh truyền thông khác.

KOL Influencer Singapore Ngành Crypto – Shaun Djie

Shaun Djie là nhà sáng lập của Digix, một nền tảng blockchain cho phép giao dịch và đầu tư vàng thông qua token hóa. Anh có tầm nhìn rộng về tương lai của tài chính phi tập trung và cách mà blockchain có thể thay đổi hệ thống tài chính toàn cầu.

KOL Influencer Singapore Ngành Crypto – Mable Jiang

Mable Jiang là đối tác quản lý tại Multicoin Capital, một quỹ đầu tư crypto hàng đầu. Cô có kinh nghiệm sâu rộng trong việc phân tích và đầu tư vào các dự án blockchain và crypto, giúp đưa ra những quyết định đầu tư chiến lược.

KOL Influencer Singapore Ngành Crypto – Vijay Ayyar

Vijay Ayyar hiện là giám đốc điều hành của Luno, một sàn giao dịch tiền điện tử được nhiều người biết đến. Với kiến thức sâu rộng về cả công nghệ blockchain và thị trường crypto, anh thường xuyên chia sẻ các bài viết về quản lý rủi ro và chiến lược đầu tư.

KOL Influencer Singapore Ngành Crypto – Remy Hennet

Remy Hennet là một trong những nhà sáng lập của OneAlpha, một công ty cung cấp các giải pháp đầu tư cho thị trường crypto. Anh thường xuyên tham gia các hội thảo và sự kiện quốc tế về blockchain, nơi anh chia sẻ những hiểu biết của mình về thị trường này.

KOL Influencer Singapore Ngành Crypto – Marcus Lim

Marcus Lim là nhà sáng lập của Zipmex, một trong những sàn giao dịch tiền điện tử nổi bật tại Singapore. Với kinh nghiệm dày dặn trong ngành công nghệ và tài chính, Marcus đã xây dựng Zipmex trở thành một nền tảng uy tín và được nhiều nhà đầu tư tin tưởng.


Các KOL Influencer Singapore ngành crypto không chỉ mang lại thông tin, phân tích sâu sắc về thị trường mà còn đóng vai trò quan trọng trong việc thúc đẩy sự phát triển của các dự án blockchain. Hãy theo dõi họ để nắm bắt những cơ hội đầu tư tốt nhất và hiểu rõ hơn về xu hướng thị trường.

ForexInfluencer và Boostenx là hai công ty marketing agency hàng đầu trong lĩnh vực fintech, forex và crypto tại các thị trường Đông Nam Á, Nam Mỹ Latinh, Trung Đông và Bắc Phi. Họ giúp các dự án tiếp cận đúng đối tượng thông qua chiến lược marketing hiệu quả. Bạn có thể khám phá thêm về họ tại ForexInfluencer và Boostenx.

 

Source: https://secafe.vn/top-kol-influencer-singapore-nganh-crypto-uy-tin-2024/

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”.

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What Singapore should do for Token Regulation: My Suggestions for Proposed DTSPs Framework

What Singapore should do for Token Regulation: My Suggestions for Proposed DTSPs Framework
  • In the first half of 2024, Singapore’s cryptocurrency and blockchain sectors grew by 22%, reaching over US$200 million.
  • The MAS proposed a risk-based regulatory approach to enhance anti-money laundering and counter-financing of terrorism.

Singapore has consistently positioned itself as a forward-thinking jurisdiction, balancing innovation with robust regulatory oversight. As a fellow Singaporean, I am very proud of its future planning.

The Monetary Authority of Singapore (MAS) is seeking submissions for the Consultation Paper on the proposed regulatory approach for Digital Token Service Providers (DTSPs) under the Financial Services and Markets Act 2022.

Instead of replying to the submission directly, I will try to share my point of view openly here, offering insights, potential plans, and timelines for implementation. Before I start, I am sharing this in my personal capacity: I do not represent any self-claimed digital assets expert groups, associations, or schools.

License Application and Fee Structures

In the first half of 2024, Singapore’s fintech market saw its cryptocurrency and blockchain sectors achieve US$211.90 million across 72 deals, marking a 22% increase from US$166.30 million over 38 deals in the second half of 2023.

Singapore has been actively working on strengthening risk management frameworks for digital asset tokenization and has recently launched an initiative to expand asset tokenization within financial services.

The proposed license application processes and fee structures are crucial elements that will shape the DTSP landscape in Singapore. From my perspective, MAS should consider implementing a tiered approach to both timelines and fees, reflecting the diversity of DTSPs in terms of size, complexity, and risk profile.

For timelines, I propose a three-tier system:

Fast-track (60 days): For small, low-risk DTSPs with straightforward business models.

Standard (90 days): For medium-sized DTSPs or those with moderately complex operations.

Extended (120+ days): For large, complex DTSPs or those proposing novel business models.

This tiered approach would allow MAS to allocate resources efficiently while ensuring thorough vetting of more complex applications. The fee structures can follow a similar tiered system based on the DTSP’s annual revenue or transaction volume could be implemented.

Minimum Financial Requirements

The proposed minimum financial requirements are a critical safeguard against potential market disruptions and consumer losses. Based on my analysis, I believe a risk-based approach to setting these requirements is more feasible. This could involve:

Base Capital Requirement: A minimum base capital for all DTSPs, regardless of size or services offered.

Risk-Weighted Capital Requirement: Additional capital requirements based on the DTSP’s types of services offered, transaction volumes, and risk profile.

Liquidity Requirement: A minimum liquidity ratio to ensure DTSPs can meet short-term obligations.

Specifically, providers with capital ratios above 15% were 30% less likely to face operational disruptions during periods of extreme market stress. I propose that MAS consider setting the base capital requirement at SGD 250,000, with additional risk-weighted requirements that could increase this amount up to SGD 5 million for the largest and most complex DTSPs.

Audit Requirements

The proposed duties of CEOs, directors, and partners, along with audit requirements, are fundamental to ensuring good governance and accountability in the DTSP sector. The following enhancement is recommended for consideration:

Mandatory Training: Annual training programs for CEOs and directors on regulatory compliance, risk management, and emerging trends in digital assets.

Risk Committee: DTSPs above a certain size must establish a dedicated risk committee at the board level.

Independent Directors: Mandating a minimum number of independent directors based on the DTSP’s size and complexity.

Audit Frequency: Annual external audits for all DTSPs, with additional quarterly internal audits for larger providers.

Regulators are increasingly leveraging technological solutions to enhance their supervisory functions and manage vast amounts of data. Consequently, firms must engage more frequently with regulators regarding fintech and regtech developments.

Fintech companies that implement robust governance structures and conduct regular audits are indeed less likely to experience compliance breaches.

AML/CFT Measures

The measures proposed in parts 5–8 of the consultation paper, particularly those related to Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT), are crucial for maintaining the integrity of Singapore’s financial system. I propose the following enhancements:

Risk-Based Approach: Implement a tiered KYC/AML approach based on transaction volumes and risk profiles.

Technology Integration: Encourage the use of AI and machine learning for transaction monitoring and suspicious activity detection.

Regulatory Technology (RegTech) Sandbox: Establish a sandbox environment for DTSPs to test innovative compliance solutions.

For existing customers onboarded prior to licensing, I suggest a phased approach:

Phase 1 (0–6 months): Risk assessment of existing customer base

Phase 2 (6–12 months): Enhanced due diligence for high-risk customers

Phase 3 (12–18 months): Full compliance with new requirements for all customers

Correspondent Account Services

The proposed requirements for Correspondent Account Services and information sharing for law enforcement purposes are essential components of a comprehensive regulatory framework. Perhaps the following would help:

Standardized Data Format: Develop a standardized data format for information sharing across the industry.

Blockchain Analytics: Encourage the use of blockchain analytics tools to enhance transaction traceability.

Secure Information Sharing Platform: Establish a secure, centralized platform for information sharing between DTSPs and law enforcement agencies.

Blockchain analytics tools have been instrumental in recovering stolen or illicitly obtained digital assets worldwide. They allow law enforcement agencies to trace and identify suspicious cryptocurrency transactions on the blockchain, leading to asset recovery efforts.

Technology Risk Management

The draft notices FSM-N28 to FSM-N33 cover critical aspects of DTSP operations, including technology risk management, cyber hygiene, and conduct. Based on my observations, I propose the following:

Continuous Monitoring: Implement real-time monitoring systems for cyber threats and operational risks.

Incident Response Drills: Mandate regular incident response drills and simulations.

Third-Party Risk Management: Establish clear guidelines for managing risks associated with third-party service providers.

Consumer Education: Require DTSPs to allocate resources for ongoing consumer education initiatives.

Regarding operating hours, perhaps MAS can consider a flexible approach that allows for 24/7 operations while ensuring adequate risk management and customer support. This could involve:

Core operating hours (e.g., 9 AM to 5 PM SGT) with full support services

Extended hours with automated systems and on-call support

Scheduled maintenance windows during low-volume periods

Timeline for Implementation:

To ensure a smooth transition to the new regulatory framework, I propose the following timeline:

Month 0–3: Publication of final regulations and guidelines

Month 3–6: Industry consultation and feedback period

Month 6–9: Finalization of technical specifications and reporting formats

Month 9–12: DTSP preparation and system upgrades

Month 12–18: Phased implementation of new requirements

Month 18–24: Full compliance deadline for all DTSPs

This timeline allows for a gradual implementation, giving DTSPs sufficient time to adapt their systems and processes while ensuring that the regulatory framework is fully operational within two years.

With careful implementation and continuous refinement, this regulatory framework has the potential to cement Singapore’s position as a global leader in digital asset regulation, attracting innovative businesses while safeguarding the interests of consumers and the broader financial system.

 

Source: https://www.financemagnates.com/cryptocurrency/what-singapore-should-do-for-token-regulation-my-suggestions-for-proposed-dtsps-framework/

 

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”.

j j j