Singapore poised for Asian crypto wealth reset.

The city-state of Singapore is known for its governmental efficiency, and it received the highest overall score for the three measures it could control: regulatory structure (35% of the total score and included in the drivers category), digital infrastructure (12%) and ease of doing business (10%), which are both part of the enablers category. Despite middling scores for quality of life – due to a very high cost of living – and per-capita crypto jobs, companies and events, which comprise the opportunities category, Singapore was firmly ensconced in second place.

To learn more about the criteria and how they were weighted, see: How We Ranked blockchain’s Crypto Hubs 2023: Our Methodology.

Despite the crypto industry’s well-earned reputation as the Wild West, crypto founders tend to prioritize predictability and clear regulations when shopping for a place to incorporate. That’s why the well-regulated, efficiently governed city-state of Singapore hosts the headquarters or satellites of some of the biggest brands in crypto, including Binance, Coinbase and Crypto.com. But after the spectacular failures of its homegrown darlings Terraform Labs and Three Arrows Capital plunged the ecosystem into Crypto Winter, Singapore’s crypto community is licking its wounds – and beginning to look to the future.

Singapore still has a strong reputation: it received the most mentions for best crypto hub in a select blockchain survey sent to about three dozen globetrotting crypto professionals this spring. The Red Dot has all the ingredients of a strong crypto hub, with the highest rating in the world for digital infrastructure (as measured by the Tufts/Fletcher Digital Evolution Index) and the second-highest ranking in the World Bank’s Ease of Doing Business index.

It is the most competitive fintech hub in the Asia Pacific region, according to the 2023 Global Financial Centres Index, edging out Hong Kong, and a regulatory leader for crypto. In 2020, the Monetary Authority of Singapore (MAS) passed the Payment Services License Act. “There were all these companies that were all rushing to Singapore to apply for the license because it was actually the first regulator in the region that had a proper digital-assets licensing framework,” said Pamela Lee, head of APAC sales at Talos, developer of institutional-grade technology for digital-asset trading.

To read more about Crypto Hubs 2023: Where to Live Freely and Work Smart.

Prakash Somosundram, founder of Enjinstarter, a blockchain-based crowdfunding platform for early crypto projects, described having had a “front row seat” to the Singaporean crypto scene since 2015. “In the early days, when it came to crypto, from a regulatory perspective, it was very pro. So this is where a lot of crypto influencers moved their capital,” Somosundram said. And with no capital gains tax, “It is an ideal place for the crypto affluent to actually come here.”

A highly educated workforce and institutional fintech know-how have been a potent mix for Singapore. Among the first initial coin offerings (ICO) were Singaporean startups such as cryptocurrency payment platform TenX, which raised $43 million in just seven minutes in 2017. That year, Singapore even surpassed the U.S. with $1.5 billion versus $1.2 billion in ICO funding, an astounding amount for a locale that is roughly the landmass of New York City, with just two-thirds of the population.

Until the current Crypto Winter, Singapore was a magnet for a stereotypically brash strain of crypto celebrity culture and lifestyle. That world centered on the wealthy enclave of Sentosa Island, which Somosundram calls “Crypto Island.” Sentosa is the only place in the city-state where foreigners can own property, and wealthy expats have flooded in. Sentosa’s inhabitants have included Chengpeng “CZ” Zhao, founder and CEO of Binance, and crypto thought leader and U.S. investor Balaji Srinivasan. Back then, crypto meetups, conferences and events were held in villas or even on yachts, Somosundram said.

Sooner than later, CZ and Balaji moved on, though. Zhuling Chen, founder and CEO of staking access startup RockX, his second crypto startup in Singapore, said that his view of the local crypto community is decidedly different from a luxury island for conspicuous billionaires. He describes a racially and gender diverse community, one that has diversified its cryptocurrency ecosystem as well. In addition to the ICOs, “Singapore had one of the earliest Ethereum communities,” he said. “When you go to NEAR meetups, or Solana, you see different people at each. There’s a strong fanbase” for a lot of different token projects.

The population of Singapore is made up of people from all over the world, with around 30% of residents being non-citizens or expats. The country’s reputation as a fintech hub has attracted talent from across the Asia-Pacific region. Enjin CEO Maxim Blagov said Singapore is a reasonably attractive place to find good talent. Blagov’s 40 employees represent eight different nationalities.

However, Singapore wants to be a fintech hub that fosters an innovative environment for people to collaborate and grow together, rather than being associated with cryptocurrency enthusiasts. The Monetary Authority of Singapore (MAS) and crypto investors are now more cautious than before. The government-owned conglomerate and VC, Temasek Holdings, wrote off $200m in losses to Sam Bankman-Fried’s now-defunct FTX. While Singapore is still committed to promoting blockchain, there is now more attention paid to know-your-customer and anti-money laundering measures. This cautious approach may drive crypto investors to move to Dubai and Hong Kong, where recent pro-crypto regulations are attracting companies and VC funding.

Enjin CEO Blagov is moving his Enjinstarter’s tokens from an offshore entity to Dubai and has applied for the first phase of the startup’s license there. However, Singapore is not losing ground to Dubai and Hong Kong as a crypto hub. It may not be easy to move an entire business that has been set up in Singapore to Hong Kong. Singapore is better-positioned in the crypto regulatory space than New York City. Crypto exchange Gemini is increasing the headcount of its Singapore outpost to over 100, compared to a reported 500 employees worldwide at present. The company believes that APAC will be a great driver of the next wave of growth for crypto and Gemini.

Edited by David Z. Morris.

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