Over the past year, cryptocurrencies have gone from being a dark part of the financial world to a central place. He Wall Street Journal reported that as of May 2021, the total value of all cryptocurrencies was worth about US $ 2.2 trillion, up from the previous year’s $ 260 billion.
A cryptocurrency is a digital asset that can be used to buy goods and services. However, it differs from fiat currency in that it uses a decentralized online book or peer-to-peer (a chain of blocks) to secure transactions.
The blockchain cannot be altered, which means that funds and assets can be transferred confidentially. This increases transparency and reduces the possibility of fraud.
Within twelve months, bitcoin, the world’s most popular cryptocurrency, exploded from trading at $ 8,166 on March 8, 2020 to reaching record highs. above US $ 61,000 in March 2021.
Other cryptocurrencies such as ether and dogecoin have also risen to heights few would have predicted a year ago.
This is nurtured by the use that individual investors make of social networking platforms such as Twitter and Reddit to raise asset prices. Elon Musk’s, founder of Teslaembrace of cryptocurrenciesand theAmerican cryptocurrency exchange list Coinbase Global Inc. it only increased their interests.
Increased public acceptance of cryptocurrencies has been accompanied by increased institutional interest, including big names such as HSBC, Goldman Sachs and JPMorgan.
Earlier this year, a Singapore investor made waves in the art world when he spent US $ 69 million (US $ 93 million) of non-expendable tokens (NFT) in a digital work of art.
NFTs function as new type of digital asset, and have gained popularity rapidly in recent years. These are unique cryptographic tokens that exist in the Ethereum blockchain and cannot be replicated.
Singapore fashion artists and gamers are also taking advantage of this NFT trend. Digital clothing it has also been making waves in NFT space, which consumers can also buy.
Singapore’s growing cryptographic scene
Like the rest of the world, interest in cryptocurrencies in Singapore has also been growing.
PwC Singapore survey for alSingapore Blockchain Ecosystem Report 2020assessed the evolution of blockchain-related activities in Singapore, with emerging blockchain as one of the top three technology trends in Singapore for 2021.
Singapore has long been a financial hub and economic power, and with the two largest countries in Asia, India and China, banning or restricting access to cryptography, Singapore has become a haven for crypto companies and lock chains in the region.
Government initiatives and institutional support from banks such as DBS have increased the visibility, legitimacy and acceptance of cryptocurrencies among the Singapore public as a valuable asset class.
In accordance withGlobal macro macro investor Raoul Pal, Singapore’s sovereign wealth fund, Temasek Holdings, has been buying Bitcoin from miners.
This information was revealed by Raoul during a recent podcast appearance. He also repeated the same statement on Twitter. The information was not confirmed by Temasek Holdings.
However, it is still clear that Singapore’s major institutions are supporting the cryptocurrency boom.
Institutional support for cryptocurrency development
DBS has created a digital exchange which allows investors to take advantage of a fully integrated tokenization, trading and custody ecosystem of digital assets.
The bank will leverage blockchain technology to provide an ecosystem for fundraising through asset tokenization and secondary trading of digital assets, including cryptocurrencies.
In May, DBS Private Bank announced that it had launched a trusted solution for cryptocurrencies through the bank’s wholly-owned trust company, DBS Trustee. This will allow its private banking customers to invest, custody and manage digital assets. Previously, this was only accessible to institutional and accredited investors.
The trust offering only applies to Bitcoin, Ether, Bitcoin Cash and XRP, which are the four cryptocurrencies hosted on the DBS Digital Exchange.
According to DBS, digital exchange has one daily trading volume between $ 30 million and $ 40 million and currently has 120 investors.
When asked about the growth potential of digital exchange, DBS CEO Piyush Guptahe shared an optimistic viewof the future of cryptocurrency.
I think that, given the amount of interest in the four cryptocurrencies we market now, that interest is pretty high. So I think he will recover. But if it reaches tens of millions or hundreds of millions of revenue over the next few years, it’s hard to say.
So my thought is that we should get into it, understand it and grow it, and then we’ll have a better idea of the size it could have over time.
– Piyush Gupta, CEO of DBS
Aside from the digital exchange it launched last December, DBS as well announced an association with Temasek and JP Morgan this April to create a new global blockchain-based payment platform.
Called Partior, it aims to break the traditional “hub and speak” model of cross-border payments, resulting in more efficient clearing and settlement of payments.
These efforts by DBS, JP Morgan and Temasek are based on their past work as part ofProject Ubin, an initiative of the Singapore Monetary Authority (MAS) industry to explore the application of blockchain technology involving multicurrency payments and settlements.
Fintech landscape regulation
To keep pace with the changing landscape of fintech technology, the Singapore Monetary Authority (MAS) enacted thePayment service law. The event has been crucial in promoting the growth of fintech technology through clear regulatory frameworks while protecting consumers.
In January 2020, the MAS devised a new version of the Payment Services Act (PS Act) to help consumers gain confidence in electronic payments and provide more protection against problems that may arise within the payment space. digital money.
It is a comprehensive regulatory framework for companies that manage activities related to digital assets, including payments and negotiation.
By law, a person must not conduct any business of providing any kind of payment service in Singapore, unless the person:
- has a valid license that entitles the person to conduct a business to provide this type of payment service; or
- is an exempt payment service provider with respect to this type of payment service.
These services include providing account issuance services, national money transfer service, digital payment token services (cryptocurrency) and more.
Applicants include leading technology companies such as Alibaba Group Holdings Ltd. and Ant Group, Binance Holdings Ltd., as well as the parent company of Google Alphabet Inc.
The chief financial officer of the authority, Sopnendu Mohanty, said in ainterview with Bloombergthat the MAS continues to process applications for the Payment Services Act.
These companies have been operating in a grace period since the regulator enacted the new Payment Services Act in January 2020.
A look at the cryptographic map of Singapore
Singapore’s blockchain and cryptocurrency ecosystem has experienced substantial growth. This includes national and international companies that are in the space of digital assets and tokenization, participation and lending, exchanges and trade, as well as advice and consulting.
The world is full of unexploited assets, from private capital to real estate. Investors have traditionally marketed these assets on paper, which is a complicated and time-consuming process. Symbolization of assets is the process of turning the property rights of a particular real-world resource into a digital witness in a chain of blogs.
Many assets can be symbolized and passed on to the blockchain, from financial instruments like stocks and bonds, to gold and even art. This helps to lower barriers to entry and friction in the exchange and trade of information.
On the other hand, bet and loans allows cryptocurrency investors to earn tokens. Participation is where users pledge to pledge money to a network to help it validate transactions, while lending refers to lending cryptocurrencies in exchange for interest payments.
Acryptocurrency exchange, or a digital currency exchange is a business that allows customers to exchange cryptocurrencies or digital currencies for other assets. This includes conventional fiduciary money or other digital currencies.
Hardware and payment gateways provide payment systems that allow merchants to accept cryptocurrencies. Finally, advice and consultancy companies are companies that help emerging companies and companies innovate in the blockchain industry.
This is just the beginning
For the cryptocurrency industry to evolve and reach its potential, we need to consider it more than an reversible asset and consider its use cases and the value that technology can provide in real life.
Many participants in the cryptocurrency industry are also developing functions to increase real-world spending applications of digital currencies.
In this “utility phase,” cryptography becomes more than just a reserve of value, driving a range of financial services. For example, Singapore start-up Ryde launched one cryptocurrency payment function this allows you to recharge your RydePAY wallet using Bitcoin.
Gorilla Mobile, a new mobile virtual network operator (MVNO) that has just launched in Singapore, makes use of the blockchain to power its SwitchBack function. This feature allows users to convert their unused mobile data into digital tabs, known as GorillaGo tabs, that work with Ethereum.
The proliferation of cryptocurrencies in our daily lives along with strong institutional and government support makes it very likely that cryptography is here to stay.
The growing number of use cases available also points to its great growth potential, indicating that the cryptographic map of Singapore will only grow in the coming years.
Featured Image Credit: Blockchain News
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