Singapore aspires to become a global hub for cryptocurrencies, but its “vigilant buying” approach does not mean that it allows all types of cryptocurrencies to be traded, and perhaps this is proven by the controversy that has arisen due to the cryptocurrency BTS linked to the group. K-Pop is the most famous in the world.
In a report published by the American “Bloomberg” website, writer Andy Mukherjee quoted the Financial Times that the Financial Authority in Singapore withdrew last July the work permit that it had submitted to the cryptocurrency trading platform Bitget. This platform sparked great controversy after engaging in a legal battle over the promotion of the “Army Coin” coin, which aims to finance the Korean band BTS for life, and the general management of Hype has denied it. Hybe, who is responsible for the Korean group's business, has a platform relationship with the group and has threatened to take legal action.
The Monetary Authority of Singapore indicated on its website that the Singapore-based BitGate platform no longer enjoys license exemption under the Payment Services Regulations 2019, without providing explanations for the reason for this decision, but the annual Financial Stability Report issued by the central bank last week, He acknowledged for the first time that “the growing interest in cryptocurrencies requires close monitoring.”
The writer stated that the increasing demand for cryptocurrencies is not a cause for concern in the near term, especially since the peak trading in cryptocurrencies using the Singapore dollar is less than 1% of the average daily trading volume on the local exchange, but the increasing share of blockchain-based currencies or blockchain Blocks (the mechanism that ensures verification of buying and selling transactions) in investors' portfolios can create a so-called "wealth effect", as the Monetary Authority of Singapore has indicated that consumption may be "vulnerable to significant shocks" due to the volatility of these digital assets.
Singapore sees increased demand for cryptocurrencies (Getty Images)
Singaporeans have been the richest for at least a decade, and real estate represents the main source of wealth with nearly 40% of household assets and 75% of the burden, and private housing prices have risen by nearly 9% since the beginning of the epidemic, and higher precautionary savings and fewer opportunities for discretionary spending have reduced debt Credit cards have reached a new low of 1% of GDP, and currently cash and deposits exceed household debt by a wide margin.
attractive environment
Singapore is a suitable environment to attract all kinds of exotic financial products, and although it has made a deliberate decision to be a major global player in the cryptocurrency markets, it does not want to open its doors on a large scale, and among the 170 companies that applied last year for licenses to trade cryptocurrency In Singapore, only 70 were accepted, including the local units of Coinbase and Binance.
Among the other companies that obtained the license is DBS - which tripled its assets in just one month to reach 600 million Singapore dollars (440 million US dollars) by the end of last October.
Given this growing appetite, Singapore must be selective about the type of cryptocurrency it promotes to investors, and this means strict law and tight control over this market, and the coin launched with the aim of financing BTS members for life is going beyond the limits of The 'prudence-to-buy' approach to financial innovation.