Well, turns out, not everyone will be welcome in Singapore when it comes to crypto, cryptocurrency
firms in Singapore are up for some major changes as the country aims to change its crypto hub
image.
Welcome to The Daily Forkast March 14th 2022.
I'm Angie Lau.
Editor in chief of Forkast, covering all things blockchain.
Well, Singapore was once a place to be for crypto firms, but retail activity is slowing
down, while the Central Bank continues to build a haven for institutional investors.
We're going to take a look at that story, plus a whole lot more coming up.
Let's get you up to speed from Asia to the world.
Join thousands of NFT traders who already start their day on Crypto slam
Well once the go to destination of cryptocurrency firms leaving China.
Singapore is now sharpening its image as a crypto hub, and it's possibly not as welcoming
as it once was.
The country's approach to cryptocurrency industry is changing, and it could dramatically affect
the hundreds of crypto firms that have already made its home in the Lion City.
Pradipta Mukherjee takes a closer look at what this all means for the wider industry.
Singapore's crypto hub image may soon change as the country makes its position clear.
The so-called wild west of crypto is no longer welcome.
The Monetary Authority of Singapore or MAS told Forkast that it has consistently warned
the general public that investing in cryptocurrencies is highly risky.
MAS also said that Singapore is not alone in holding this view, since other countries
are also taking measures in relation to advertising by crypto firms.
Back in January, the MAS restricted cryptocurrency service providers from promoting their services
to the general public.
Andrew Bailey, associate professor at Yale and N.U.S.
College in Singapore, told Forkast that regulators are increasingly distinguishing between retail
and institutional activities.
He says one of the reasons for the differentiation is the uncertainty over who will become Singapore's
next prime minister.
And that ambiguity over policy direction has seen regulators take a cautious approach.
A case in point is the digital exchange platform Tokenize.
The firm currently operates under an exemption from the MAS and has applied for a digital
payment token license.
They have been waiting for that license for two years now.
Almost 500 license applications have been made since the commencement of the Payment
Services Act in January 2020, of which about 170 aim to provide digital payment token services.
But just four licenses have been granted so far.
Tokenize CEO Hong Qi Yu told Forkast that gaining a license is vital for business sustainability,
but he remains bullish about the future of the industry in the Lion City.
Singapore has grown for the past four years from only two percent crypto holders to almost
more than 20 percent crypto holders in the Singapore populations, and I further see this
growth to double or triple for the next two years.
Qi Yu says he hopes the rule banning marketing can be dropped once more people understand
Crypto better.
Meanwhile, Singapore's Finance Minister Lawrence Wong has said NFTs are subject to the existing
income tax rules of the country.
However, in local media, Wong clarified that individuals who received capital gains from
NFT transactions will not be taxable as there is no capital gains tax in Singapore.
For Forkast, I am Pradipta Mukherjee.
Financial inclusion has long been highlighted as a key benefit stemming from the development
of the blockchain world, and tokenization is a key component to this as it allows for
the fractionalization of assets, which of course enables more retail investors to get
on board.
But could this element of financial inclusion be improved?
And who better to ask about the potential tokenizing the world offers than Henry Chong,
CEO of Fusang.
Fusang aims to reshape investment markets with blockchain technology.
So Henry, we got to ask you.
Financial inclusion, you know it is -it is that holy grail.
And we know that fractionalization can open up assets that were previously inaccessible
to investors.
But is that enough?
And what more could be done to further open things up and enhance inclusion?
I think fractionalization is just one small piece of a larger message around access.
The truth is that a lot of individuals today just don't have the same kind of access in
financial markets that, quite frankly, rich people do.
And you know, people once you know, people say, Hey, where are the tokenized assets?
There are a lot of them out there.
Obviously, we've got all kinds of cryptocurrencies and NFTs, etc, and that world is expanding
rapidly and scaling like we've never seen an asset class before.
And my issue has always just been that as interesting as the technology is, as interesting
as this idea of tokenization is got to still ask, Hey, what are these assets?
And in terms of having tokens backed by real assets?
Shares in companies, real estate, etc, those are still few and far between.
But when you open it up to retail, a big chunk of it is understanding just what the opportunity
is.
So how does opening up the markets in this way apply to even bonds?
What advantages does that offer from a retail market perspective and also an institutional
market perspective
When it comes to things like bonds?
A lot of demand that we're seeing in areas like ESG, for example, is actually driven
by individuals and by retail investors.
This is a demand driven revolution.
People are saying, I do want to make good investments, but I also want to do good for
the world, and institutions are forced to respond to that overwhelming wave of demand.
You know, even in our corner of the world in Malaysia, things like Islamic finance,
Sukuks are, you know, a very important part of what people want to invest into.
Again, though, a very close, limited access market, and I think that individuals should
have the right to deploy capital to the asset classes where they want to invest, especially
when these are quite frankly, probably safer investments.
Things like bonds or Sukuks that give you that fixed rate of return at a much lower
risk.
Yeah, I want to pick up on that point because, you know, Malaysia is a fascinating market.
You have a lot of experience obviously there.
And the market for Sukuk Islamic bonds is huge.
How about the potential for those to be tokenized?
Is there demand for such a thing even?
What are your thoughts?
Malaysia as a country dominates the world in terms of volume and, you know, dollar value
of Sukuk issuances.
And yet most of that is priced in ringgit, a local currency not really accessible to
foreign investors and certainly not accessible to retail investors.
It's really a very institutional market.
You've got issuers who want to issue Sukuks and you've got kind of long only investment
funds and pension funds who buy into these things.
And that all works, but it means that the individual doesn't have a chance to access
that market -not directly.
And I think they should, because Sukuks as a market are interesting because the default
rate is phenomenally low.
And for our audience, not too familiar with Sukuk Islamic bonds - explain that a little
bit and what the opportunity is
Coming back to our message about financial inclusion.
Sukuk as an instrument at the core, almost by definition require that element of financial
inclusion or at least alignments that idea that if I invest into a project, I need to
be aligned with the project and I need to have an interest in the outcome of the project,
as opposed to a debt investor who, quite frankly, may or may not care about the success of a
company.
They just want to make sure that they get their coupon payment.
And it sounds very much aligned to the philosophy behind tokenization.
And there we have it Tokenizing The World Henry Chong of Fusang.
Thanks so much for joining us today.
Taking a look at some other news from around Asia, now in Korea.
Competition is heating up to grab White Day NFTs.
Now what's White Day, you might ask?
Well, it's a holiday celebrated in South Korea and Japan on March 14th.
That's today where art lovers reciprocate for gifts they received a month earlier on
February 14th Valentine's Day and convenience store chain CU is getting in on the game by
giving away 314 White Day themed pixel art characters designed by NFT artists Laylay.
Participants can enter the draw to win once a day throughout March after purchasing goods
and collecting points with their CU membership.
Over 20,000 applicants have already signed up and competition to win the most popular
of the NFTs is fierce.
Entrants chances of winning one of the candy lover NFTs are currently 73 to one.
And finally, speaking of NFTs, how about wearing your designer jewelry in the metaverse as
well as the real world?
Well, that's exactly what the new owner of a pair of earrings called Limitless from the
brand L'Dezen can do after making their purchase on the Digital Twin NFT marketplace over the
weekend.
Along with shipping the physical jewelry, the designers will also help put the earrings
on any avatars the buyer holds.
Interestingly, the winning bid wasn't too astronomical at 3.27 ETH, or a little over
US$8,000.
However, the sale offered not only the fun stuff like dressing up your avatar, but also
the use of a smart contract offering additional peace of mind over the history of the earrings
for any future sales.
Now, the luxury brands that you and I all know and love LVMH, Prada, Richemont made
a similar move last year with their Aura Blockchain Consortium, offering customers access to product
history and proof of authenticity.
Kind of like bridging the real world to the metaverse through what we wear, which is,
as you know, a universal expression of self and that many brands hope to digitize and
monetize.
You'll see this more and more.
No doubt.
And that's The Daily Forkast from our vantage point right here in Asia.
For more visit Forkast.News.
I'm Editor in Cchief Angie Lau.
Until the next time.