Why Singapore is one of the most crypto-friendly countries

2 years ago

In her monthly Expert Take column, Selva Ozelli, an planetary taxation lawyer and CPA, covers the intersection betwixt emerging technologies and sustainability, and provides the latest developments astir taxes, AML/CFT regulations and ineligible issues affecting crypto and blockchain.

At the extremity of 2021 — a twelvemonth successful which Bitcoin (BTC) and Ether (ETH) roseate 100% and 300%, respectively — planetary crypto standing institution Coincub ranked Singapore arsenic the astir crypto-friendly state successful the satellite owed to its “robust economy, affirmative legislative environment, and precocious complaint of cryptocurrency adoption.”

Cryptocurrency user extortion law

Singapore’s regulators person done a large woody to nurture the blockchain industry. Its No. 1 ranking by Coincub was proven close by the prompt regulatory measures implemented by the Monetary Authority of Singapore (MAS), the country’s main fiscal regulatory body, erstwhile the cryptocurrency marketplace began crashing during January 2022 and entered carnivore marketplace territory.

During mid-January, Singapore’s MAS enacted user extortion laws for investors exposed to changeless reminders of integer assets via billboard ads oregon crypto ATMs, banning each cryptocurrency-related advertisements and ATMs successful nationalist spaces.

In a statement, MAS said that portion it “strongly encourages” blockchain exertion improvement and innovative crypto usage cases, cryptocurrency trading is “highly risky and not suitable for the wide public.” As such, cryptocurrencies should not beryllium portrayed “in a mode that trivialises the precocious risks of trading” them.

Payment Services Act, January 2020

In January 2020, Singapore’s Payment Services Act came into effect arsenic a effect to the Financial Action Task Force’s 2018 update to its Anti-Money Laundering (AML) and Combatting the Financing of Terrorism (CFT) cross-border hazard guidelines for cryptocurrencies. The Payment Services Act is simply a flexible model for the regularisation of outgo systems and outgo work providers successful Singapore that establishes registration requirements on with AML and CFT guidelines for cryptocurrency businesses.

MAS has been selective successful issuing licenses to cryptocurrency businesses, with a ample fig of applicants failing to person licenses to operate successful the country. DBS Bank — Singapore’s largest slope — arsenic good arsenic OCBC Bank, IBM and two institutional-grade Bitcoin funds launched by Singapore-based money manager Fintonia Group are among those that received licenses to operate.

Initial coin offerings

In effect to a question of archetypal coin offering launches, MAS archetypal published guidelines successful August 2017 indicating that if an ICO was deemed to beryllium issuing a security, it would beryllium taxable to regulation. This was followed by MAS issuing “A Guide to Digital Token Offerings,” which provides further mentation and direction connected the regularisation of cryptocurrencies successful Singapore.

Taxation of cryptocurrencies

Singapore is simply a low-tax jurisdiction. According to Desmon Teo and Lee Vin Wee of Big Four accounting steadfast Ernst & Young, the Inland Revenue Authority of Singapore exempted integer outgo tokens from goods and services taxation effectual Jan. 1, 2020. Since determination are nary superior gains taxes successful Singapore, superior gains derived from the merchantability of cryptocurrencies are not taxable either.

Blockchain adoption

Singapore, which is simply a large fiscal halfway and shipping hub and has the tenth-highest GDP per capita, has emerged successful a abbreviated play arsenic a planetary cryptocurrency hub amid its favorable regulatory and taxation infrastructure and by utilizing blockchain exertion successful galore areas of its economy. MAS is bullish connected the imaginable of crypto and blockchain, peculiarly successful expediting cross-border payments and commercialized finance, but frowns connected cryptocurrencies arsenic concern assets for retail investors.

Cryptocurrency exchanges

According to 1 survey, 43% of Singaporeans ain cryptocurrency. In comparison, the wide crypto ownership rate is 11.3% successful South Africa, 10.5% successful the United States and 9.8% successful Sweden.

Retail investors tin commercialized cryptocurrencies connected a multitude of crypto exchanges, including Coinbase, Kraken, FTX, Bybit, KuCoin, Vauld, Independent Reserve, Gemini, Coinhako, Tiger Brokers, Futu’s Moomoo and Syfe. Binance, the world’s largest crypto exchange, acquired an 18% stake successful the Singapore-regulated backstage securities speech Hg Exchange earlier announcing it would discontinue its operations astatine Binance Singapore by mid-February 2022. This announcement was followed by a peculiar study by Reuters detailing Binance’s opaque firm operation coupled with anemic planetary AML and CFT compliance.

Huobi, the world’s sixth-largest crypto exchange, besides announced it would beryllium shutting accounts successful Singapore by the extremity of March 2022. SIX Digital Exchange — a sister institution of SIX Swiss Exchange, which operates Switzerland’s nationalist banal speech — announced a partnership with SBI Digital Asset Holdings, a part of Japanese banking and fiscal services elephantine SBI Group, to found a crypto speech and cardinal securities depository successful Singapore. The associated venture, called Asia Digital Exchange, is designed to make a regulated, planetary liquidity excavation for integer assets betwixt Asia and Europe.

Banking

A multitude of large banks — including Barclays, BNP Paribas, BNY Mellon, Citi, Deutsche Bank, HSBC, Orient Securities, Standard Chartered, Societe Generale and United Overseas Bank — person joined Marketnode, a integer plus associated task of large concern holding institution Singapore Exchange (SGX) and government-backed concern steadfast Temasek. The extremity is to research the usage of blockchain technology focused connected superior markets workflows done astute contracts, ledger and tokenization technologies. Marketnode besides partnered with Singapore-based fintech steadfast RootAnt Global and United Kingdom-based blockchain level SETL to absorption connected fixed income and multi-asset end-to-end infrastructure development.

Grab — a Singapore- and Indonesia-headquartered institution focused connected mobile applications for transportation, nutrient transportation and cryptocurrency payments — and Singapore Telecommunications person each acquired a 16.3% involvement successful PT Bank Fama International successful bid to prosecute integer banking opportunities successful Indonesia. The 2 collectively secured a integer banking licence successful Singapore.

Cap and commercialized and renewable vigor trading exchanges

Efforts for a greenish betterment from the COVID-19 pandemic person been gathering velocity astir the world, peculiarly following the COP26 conference successful November 2021. Singapore is susceptible to rising water levels arsenic a effect of planetary warming, with 30% of the landmass little than 5 meters (16 feet) supra oversea level.

Singapore uses earthy state to make power, and the nation’s Sunseap Group, a star vigor strategy developer, plans to walk $2 cardinal to physique the world’s largest floating star workplace successful the Indonesian metropolis of Batam, doubling its renewable vigor capacity. Temasek is collaborating with DBS Bank, SGX and Standard Chartered to create a blockchain-based exchange, Climate Impact X, to commercialized c credits. The state already hosts a blockchain-powered speech for renewable vigor trading from utilities supplier SP Group.

Green cryptocurrency mining companies

Cryptocurrency mining is the process of obtaining caller tokens by solving analyzable calculations performed by almighty computers, which request a ample magnitude of energy to function. China, erstwhile the world’s largest crypto miner, cited the instability of cryptocurrency values erstwhile it unopen down crypto miners successful May 2021, arsenic the profitability of mining companies is tied to the terms of cryptocurrencies.

Bitdeer, Saitech, Sharemine AI and BitFuFu are each Singapore-based cryptocurrency mining companies with mining operations extracurricular the country. Bitdeer and Saitech are seeking to beryllium publically listed connected Nasdaq. Saitech recycles the discarded vigor from mining for usage successful residential, cultivation and concern applications. Bitdeer and Sharemine AI mine with cleanable vigor generated from hydroelectric and star power.

Shipping

A caller survey carried retired by Nanyang Technological University successful Singapore examined Singapore’s and China’s shipping industries to show that digitizing shipping documents could trim much than 99% of the c emissions that effect from the usage of insubstantial documents.

PSA International, the world’s largest instrumentality larboard relation — with flagship operations successful Singapore and Antwerp and locations successful 26 countries — is exploring utilizing blockchain and integer assets for decarbonization goals. The institution is simply a subordinate successful proviso concatenation blockchain platforms TradeLens and GSBN and an indirect number shareholder successful Global eTrade Services, which offers its Open Trade Blockchain for documents. PSA signed a woody with Singapore consulting steadfast RHT Group of Companies for an environmental, societal and governance project.

Startups

Tribe Accelerator is simply a blockchain accelerator launched by Trive Ventures, a Singaporean task superior firm, with the halfway extremity of expanding and streamlining blockchain adoption successful Asia, beyond fiscal services applications. It is the archetypal blockchain accelerator supported by the Singaporean authorities (it is backed by MAS and Temasek).

Other backers include Citibank, IBM, Intel, BMW, Korea Investment Partners, Mandiri Investment Management Singapore — a subsidiary of Indonesian state-owned Bank Mandiri — Greg Kidd — an aboriginal Twitter, Coinbase and Square capitalist — and Hong Kong-based concern steadfast Stellar Partners. So far, Tribe has funded much than 30 startups with a combined worth of much than $1 billion. In November 2021, Microsoft launched its Singapore GreenTech Challenge to accelerate advancement successful startups successful an effort to instrumentality Singapore’s Green Plan.

Central slope integer currency

Singapore, done its Project Ubin, is 1 of 87 countries exploring a cardinal slope integer currency (CBDC), according to the Atlantic Council.

MAS has been investigating CBDCs and discussing the instauration of aggregate CBDC arrangements to amended the speed, outgo and transparency of cross-border payments. It has developed a prototype multi-currency wholesale colony web to enable the issuance and distribution of assorted CBDCs connected a communal web successful concern with China.

Nonfungible token

Singapore Art Week 2022, which ran from Jan. 14 done Jan. 23, hosted TZ APAC, which celebrated Asian integer artists successful an industry-first nonfungible token (NFT) showcase astatine the S.E.A. Focus showcase.

ArtScience Museum successful Singapore — the archetypal depository successful Asia with large exhibitions to integrate art, science, civilization and exertion — opened its newest exhibition, “Radical Curiosity: In the Orbit of Buckminster Fuller,” successful conjunction with the last play of Singapore Art Week, according to Adrian George, manager of programs, exhibitions and depository services astatine ArtScience Museum.

Known arsenic the “grandfather of the future” by his admirers, Richard Buckminster Fuller was an American architect, systems theorist, inventor and writer who predicted a exertion akin to blockchain, connected which cryptocurrency is based. In a video interrogation from 1967, Fuller states:

“I’ll person to speech astir thing which volition beryllium 1 of the precise big, caller realizations by 2000 AD, which volition beryllium a realistic technological accounting strategy of what is wealth. [...] Wealth is energy.”

While ArtScience Museum did not connection NFTs of the “Radical Curiosity: In the Orbit of Buckminster Fuller” exhibition, present is 1 of Fuller created by Freeos and shared connected Twitter:

Just dropped this Buckminster Fuller #NFT to each of our #Freeos Beta Testers. Thank you everyone!https://t.co/yBXH5ZRJEu pic.twitter.com/zmyRKu64R1

— Freeos (@Freeos_dao) October 6, 2021

The views, thoughts and opinions expressed present are the author’s unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.

Selva Ozelli, Esq., CPA, is an planetary taxation lawyer and certified nationalist accountant who often writes astir tax, ineligible and accounting issues for Tax Notes, Bloomberg BNA, different publications and the OECD.

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